Retail Price Data For $n = 60$ Hard Disk Drives Were Recently Reported in a Computer Magazine

question 36

Multiple Choice

Retail price data for $n = 60$ hard disk drives were recently reported in a computer magazine. Three variables were recorded for each hard disk drive:
$y =$ Retail PRICE (measured in dollars)
$x _ { 1 } =$ Microprocessor SPEED (measured in megahertz)
(Values in sample range from 10 to 40 )
$x _ { 2 } =$ CHIP size (measured in computer processing units)
(Values in sample range from 286 to 486 )

a first-order regression model was fit to the data. Part of the printout follows:

$\begin{array}{rrrrrrrrr}\hline &&&\text { Dep Var}&\text { Predict}&\text { Std Err }&\text {Lower 95\% }&\text {Upper 95\% }\\\text { OBS}& \text {SPEED}&\text { CHIP } & \text { PRICE } & \text { Value } & \text { Predict } & \text { Predict } & \text { Predict } & \text { Residual } \\1 & 33 & 286 & 5099.0 & 4464.9 & 260.768 & 3942.7 & 4987.1 & 634.1 \\\hline\end{array}$

Interpret the interval given in the printout.

• A) We are \(95 \%\) confident that the price of a single hard drive falls between \(\$ 3,943\) and \(\$ 4,987\).
• B) We are \(95 \%\) confident that the average price of all hard drives falls between \(\$ 3,943\) and \(\$ 4,987\).
• C) We are \(95 \%\) confident that the price of a single hard drive with 33 megahertz speed and 386 CPU falls between \(\$ 3,943\) and \(\$ 4,987\).
• D) We are \(95 \%\) confident that the average price of all hard drives with 33 megahertz speed and 386 CPU falls between \(\$ 3,943\) and \(\$ 4,987\).

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Definitions:

Money Market Securities

Short-term financial instruments typically with high liquidity and minimal risk.

Capital Market Securities

Long-term financial instruments traded in capital markets, such as bonds, stocks, or debentures.

Liquid

Describes an asset that can be quickly converted into cash without significant loss of value or a market where such assets can be bought or sold with ease.

Financial Intermediaries

Institutions that facilitate the channeling of funds between savers and borrowers by intermediating financial transactions.