SCENARIO 12-1
a Large National Bank Charges Local Companies for Using

question 192

Multiple Choice

SCENARIO 12-1
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: $$Y _ { i } = \beta _ { 0 } + \beta _ { 1 } X _ { i } + \varepsilon _ { i }$$
Theresultsofthesimplelinearregressionareprovidedbelow.
$$\bar { I } = - 2,700 + 20 X , S _ { Z X } = 65 \text {, two-tail } p \text { value } = 0.034 \text { (for testing } \beta _ { 1 } \text { ) }$$
-Referring to Scenario 12-1, 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 \(\alpha\) = 0.05 level, there is no evidence of a linear relationship between service charge (Y)and sales revenue (X).

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