SCENARIO 13-1
a Large National Bank Charges Local Companies for Using

question 102

Multiple Choice

SCENARIO 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 = $\beta$ ₀ + $\beta$ ₁ X_i + $\varepsilon$ _i
The results of the simple linear regression are provided below.
? = -2,700 +20 X ,S_YX = 65,two-tail p value = 0.034 (for testing $\beta$ ₁)
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-Referring to Scenario 13-1,a 95% confidence interval for $\beta$ ₁ is (15,30) .Interpret the interval.

• A)You are 95% confident that the mean service charge will fall between $15 and $30 per month.
• B)You are 95% confident that the sales revenue (
• X)will increase between $15 and $30 million for every $1 increase in service charge (
• Y).
• C)You are 95% confident that mean service charge (
• Y)will increase between $15 and $30 for every $1 million increase in sales revenue (
• X).
• D)At the ? = 0.05 level,there is no evidence of a linear relationship between service charge (
• Y)and sales revenue (

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