TABLE 13-1 A Large National Bank Charges Local Companies for Using Their

question 105

Multiple Choice

TABLE 13-1
A large national bank charges local companies for using their 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 service charges to a company is the company's sales revenue (X) -measured in millions of dollars.Data for 21 companies who use the bank's services were used to fit the model:
Y_i = β₀ + β₁X_i + ε_i
The results of the simple linear regression are provided below.
-Referring to Table 13-1,interpret the estimate of β₀,the Y-intercept of the line.

• A)All companies will be charged at least $2,700 by the bank.
• B)There is no practical interpretation since a sales revenue of $0 is a nonsensical value.
• C)About 95% of the observed service charges fall within $2,700 of the least squares line.
• D)For every $1 million increase in sales revenue,we expect a service charge to decrease $2,700.

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Definitions:

Pan-Indianism

A movement or ideology that promotes unity among different Native American tribes in response to shared social and political challenges.

American Indians

Indigenous peoples of the United States, including various tribes, nations, and communities, each with their own distinct cultures, languages, and histories.

Urban Areas

Geographical areas characterized by higher population density and vast human features in comparison to areas surrounding it, often associated with cities and metropolitan regions.

Methodological Choices

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