Question

The commercial division of a real estate firm is conducting a regression analysis of the relationship between x, 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 + 7.24 X Predictor Coef SE Coef T Constant 20.000 3.2213 6.21 X 7.240 1.3625 5.29 Analysis of Variance SOURCE DF SS Regression 1 41,587.8 Residual Error 7 Total 8 51,984.3 a. How many apartment buildings were in the sample? b. Write the estimated regression equation (to 2 decimals if necessary). ŷ = + x c. What is the value of sb1 (to 4 decimals)? 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). What is the p-value? p-value is Selectless than .01between .01 and .025between .025 and .05between .05 and .10greater than .10 What is your conclusion? SelectConclude that the selling price is related to annual gross rents.Cannot conclude that the selling price is related to annual gross rents. e. Predict the selling price of an apartment building with gross annual rents of $60,000 (to 1 decimal). $ thousands.

Answer 1

(a) 9

(b) Y =20.0 + 7.24 X

(c) 1.3625

(d) F test statistic = 28

p-value is less than .01

Conclude that the selling price is related to annual gross rents.

SOURCE	DF	SS	MS	F	p-value
Regression	1	41,587.8	41587.8	28.00	0.0011
Residual Error	7	10,396.5	1485.21
Total	8	51,984.3

(e) Y =20.0 + 7.24*6

Y = 63.4

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