Bivariate Fit of Capital By Rental 3500 3000 2500 a 2000 1500 1000 500 4 10 12 R

Question

Bivariate Fit of Capital By Rental 3500 3000 2500 a 2000 1500 1000 500 4 10 12 Rental -Linear Fit Linear Fit Capital- -465.2883 + 228.8306 Rental Summary of Fit RSquare RSquare Adj Root Mean Square Error 423.1768 Mean of Response Observations (or Sum Wgts) 0.624992 0.621002 1725.698 96 Lack Of Fit Analysis of Variance Sum of Source Model Error C. Total DF Squares Mean Square FRatio 28054635 156.6610 1 28054635 94 16833387 95 44888022 179078.59 Prob>F t Intercept-465.2883 180.2983 2.58 0.0114 Rental 228.8306 18.28242 12.52

Explanation / Answer

Part j

Here, we have to find predicted capital value for the given value of rental value = $9500.

Required regression equation is given as below:

Capital = -465.2883 + 228.8306*Rental

Capital = -465.2883 + 228.8306*9500

Capital = 2173425.412

Predicted Capital = $2173425

Part k

Here, we have to find predicted capital value for the given value of rental value = $18000.

Required regression equation is given as below:

Capital = -465.2883 + 228.8306*Rental

Capital = -465.2883 + 228.8306*18000

Capital = 4118485.512

Predicted Capital = $4118486

Part l

The predicted values in 2(j) is more reliable.

Prediction of the capital value of a commercial property that has a rental value of $9500 is more reliable. So, correct answer is i. (The value of dependent variable is lies within range of dependent variable.)

Part m

The option i is more reliable because the value $9500 is lies within the range of rental values while the value $18000 is not lies within the range of rental values.

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