TABLE 14-6 One of the Most Common Questions of Prospective House Buyers

question 163

Multiple Choice

TABLE 14-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) .To provide its customers with information on that matter,a large real estate firm used the following 2 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X₁) and the amount of insulation in inches (X₂) .Given below is EXCEL output of the regression model. Also SSR (X₁ ∣ X₂) = 8343.3572 and SSR (X₂ ∣ X₁) = 4199.2672
-Referring to Table 14-6,what can we say about the regression model?

• A)The model explains 17.12% of the variability of heating costs; after correcting for the degrees of freedom,the model explains 27.78% of the sample variability of heating costs.
• B)The model explains 19.28% of the variability of heating costs; after correcting for the degrees of freedom,the model explains 27.78% of the sample variability of heating costs.
• C)The model explains 27.78% of the variability of heating costs; after correcting for the degrees of freedom,the model explains 19.28% of the sample variability of heating costs.
• D)The model explains 19.28% of the variability of heating costs; after correcting for the degrees of freedom,the model explains 17.12% of the sample variability of heating costs.

Comprehend the implications of currency valuation changes on comparative advantages.

Calculate the cost of preferred stock.

Understand the concept of beta and its impact on the cost of equity and appropriate discount rates for projects.

Determine appropriate discount rates for specific project betas.

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Definitions:

Discounting

In psychology, a cognitive bias where an individual minimizes the significance or worth of an event or object.

Mutual Appreciation

A reciprocal recognition and respect for the value and qualities of another person or group.

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Educators specialized in early childhood development who instruct and care for children aged three to five years old.

Savior Complex

A psychological construct where a person believes they are responsible for saving or rescuing others.