Question

The commercial division of a real estate firm is conducting a regression analysis of the relationship between 2, annual gross rents (in thousands of dollars), and y selling price (in thousands of dollars) for apartment buildings. Data were collected on several properties recently sold and the following computer output was obtained. The regression equation is Y=20.0 +7.22 X Predictor Constant Coef 20.000 7.220 SE Coef 3.2213 1.3625 T 6.21 SS Analysis of Variance SOURCE Regression Residual Error 41,587.3 Total 51,984.4 a. How many apartment buildings were in the sample? b. Write the estimated regression equation (to 2 decimals if necessary). c. Use the t statistic to test the significance of the relationship at a .05 level of significance. What is the p-value? Use Table 1 of Appendix B. p-value is - Select your answer What is your conclusion? - Select your answer d. Use the F statistic to test the significance of the relationship at a .05 level of significance Compute the F test statistic (to 2 decimals).

Answer 1

Solution? Given that The regression equation es r= 20.0 7722 * (a) Here we have to find How many apartment buildings were there in the sample: No. of apartments in the sample =8+1=19. (b) we find the Estimated Degression Equation := 20.0] + 7-22] x C) we have to find the p-value : from the given data . :: a=0:05 :: : Residual degree of freedom = t-value = 5.29 TP-value = 0.00113 7 : p-value coa-value conclusion We conclude that the annual price gross Price e related to celling rents,

we compute the f-test Statistic F F-test statistic = ss Creg) /DF Crea) ss (Reg)) OF CREB) ? 41587.611 (51984.q- 41587-6)/7. 2. Given that SS - regression 2 41587.6 . OF- regression = ' . Ss- residual error = (total- 8% regression )+(51984.9-415374 DF- regudual Error = 7 41587.6 10397.3/7 41587.6 1485.3286 :::. .:= 27.9989 ♡ 28-0. F= 28 P -value = 0.00113) La H Conclusion: We conclude that selling price is related to annrial gross rente... (@) we predict the selling price of an apartinent building with gross annual rents of $50,000. predicted selling price = 20.0+ 7.22x50,000 ) 20 7360.5 : : : : 20.07 361. a $ 381 Thousands
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