A large national bank charges local companies for using its services. A bank off

Question

A large national bank charges local companies for using its services. A bank official reported the results of a regression analysis designed to predict the? bank's charges? (y), measured in dollars per? month, for services rendered to local companies. One independent variable used to predict the service charge to a company is the? company's sales revenue? (x), measured in $ million.Data for 21 companies who use the? bank's services were used to fit the model

?E(y)=?0+?1x.

The results of the simple linear regression are provided below. Interpret the estimate of

beta 0?0?,

the? y-intercept of the line.

y=?2,700+20x

?????????????

A.

There is no practical interpretation since a sales revenue of? $0 is a nonsensical value.

B.

About? 95% of the observed service charges fall within? $2,700 of the least squares line.

C.

All companies will be charged at least? $2,700 by the bank.

D.

For every? $1 million increase in sales? revenue, we expect a service charge to increase? $2,700.

Explanation / Answer

here for intercept represent bank charge when sales revenue is 0 ; option C is correct

All companies will be charged at least? $2,700 by the bank.

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