The data show the list and selling prices for several expensive homes. Find the

Question

The data show the list and selling prices for several expensive homes. Find the regressionequation, letting the list price be the independent (x) variable. Find the best predicted selling price of a home having a list price of $4 million. Is the result close to the actual selling price of $4. million? Use a significance level of 0.05.

List price (millions of $) 3.1, 4.2, 3.1, 1.9, 1.8, 1.9

Selling price (millions of $) 3.4, 4.4, 3.5, 2.2, 1.9, 2.2

What is the regression Equation

Y^= _____________+_____________ round to four decimal places as needed

Y^ = $______________ million round to two decimal places as needed

Is the result close to the actual selling price of 4.2 million?

A) The result is close to the actual selling price of 4.2 million

B) The result is exactly the same as the actual selling price of 4.2 million

C) The result is not close to the actual selling price of 4.2 million

Explanation / Answer

Using technology, we get              
              
slope =    1.013610315          
intercept =    0.230372493          
              
Thus, the regression line is              
              
y^ =    0.230372493 + 1.013610315 x [ANSWER]

**************************************
              
Thus, if x =    4          
              
Then              
              
y^ =    4.284813754   [ANSWER]

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As we see, it is close to 4.2 Million, so

OPTION A) The result is close to the actual selling price of 4.2 million [ANSWER, A]      

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