The commercial division of a real estate firm is conducting a regression analysi

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.

51,984.5

a.  What is the value of sb1 (to 4 decimals)?

b. Predict the selling price of an apartment building with gross annual rents of $50,000 (to 1 decimal).
$ _______ thousands.

The regression equation is Y =20.0 + 7.28 X Predictor Coef SE Coef T Constant 20.000 3.2213 6.21 X 7.280 1.3628 5.29 Analysis of Variance SOURCE DF SS Regression 1 41,587.9 Residual Error 7 Total 8

51,984.5

Explanation / Answer

a) from given output ;  value of sb1 =1.3628

b)

Predicted selling price =20+50*7.280=384 thousands

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