# Question 8 4 4 points a real estate builder wishes to

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Question 8 4 / 4 points A real estate builder wishes to determine how house size (House) is influenced by family income (Income), family size (Size), and education of the head of household (School). House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is in years. The builder randomly selected 50 families and ran the multiple regression. The business literature involving human capital shows that education influences an individual’s annual income. Combined, these may influence family size. With this in mind, what should the real estate builder be particularly concerned with when analyzing the multiple regression model? Non-randomness of error terms Multicollinearity Missing observations All of the above
Question 9 4 / 4 points TABLE 15-3 In Hawaii, condemnation proceedings are under way to enable private citizens to own the property that their homes are built on. Until recently, only estates were permitted to own land,
and homeowners leased the land from the estate. In order to comply with the new law, a large Hawaiian estate wants to use regression analysis to estimate the fair market value of the land. The following model was fit to data collected for n = 20 properties, 10 of which are located near a cove. where Y = Sale price of property in thousands of dollars X1 = Size of property in thousands of square feet X2 = 1 if property located near cove, 0 if not Using the data collected for the 20 properties, the following partial output obtained from Microsoft Excel is shown: SUMMARY OUTPUT Regression Statistics Multiple R 0.985 R Square 0.970 Standard Error 9.5 Observations 20 ANOVA df SS MS F Signif F Regression 5 28324 5664 62.2 0.0001 Residual 14 1279 91 Total 19 29063 Coeff StdError t Stat P-value Intercept - 32.1 35.7 – 0.90 0.3834 Size 12.2 5.9 2.05 0.0594 Cove – 104.3 53.5 – 1.95 0.0715 Size*Cove 17.0 8.5 1.99 0.0661 SizeSq – 0.3 0.2 – 1.28 0.2204 SizeSq*Cove – 0.3 0.3 – 1.13 0.2749 Referring to Table 15-3, is the overall model statistically adequate at a 0.05 level of significance for predicting sale price ( Y )?
Question 10 4 / 4 points
The overall upward or downward pattern of the data in a monthly time series will be contained in the ____________ component.