Provide an appropriate response. 48) A real estate magazine reported the results

Question

Provide an appropriate response. 48) A real estate magazine reported the results of a regression analysis designed to predict the price (y). measured in dollars, of residential properties recently sold in a northern Virginia subdivision. One independent variable used to predict sale price is GLA, gross living area (x), measured in square feet. Data for 157 properties were used to fit the model, E(y)-Po + ?1x. The results of the simple inear regression are provided below. y- 96,600+22.5x s 6500 R2-0.77 t 6.1 (for testing B1) Interpret the value of the coefficient of determination, R2 A) 77% of the observed sale prices (y's) will fall within 2 standard deviations of the least squares line. B) GLA (x) is linearly related to sale price (y) 77% of the time. C) There is a moderately strong positive correlation between sale price () and GLA ). D) 77% of the total variation in the sample sale prices can be attributed to the linear relationship between GLA (x) and (y).

Explanation / Answer

We know that coefficient of determination R^2 is a measure of the proportion of variation in Y that is explained by regression line using X as a predicting variable.

Hence here D ) 77 % of the total variation in the sample sale prices can be attributed to the linear relationship between GLA(x) and (y). is the correct option.  

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