A Large National Bank Charges Local Companies for Using Their $( y )$

question 71

Multiple Choice

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 charge to a company is the company's sales revenue $( x )$ , measured in $ million. Data for 21 companies who use the bank's services were used to fit the model
$$E ( y ) = \beta _ { 0 } + \beta _ { 1 } x .$$
The results of the simple linear regression are provided below.
$$\hat { y } = 2,700 + 20 x , s = 65,2 \text {-tailed } p \text {-value } = .064 \text { (for testing } \beta _ { 1 } \text { ) }$$
Interpret the $p$ -value for testing whether $\beta _ { 1 }$ exceeds 0 .

• A) There is insufficient evidence (at \(\alpha = .05\) ) to conclude that service charge \(( y )\) is positively linearly related to sales revenue \(( x )\).
• B) Sales revenue \(( x )\) is a poor predictor of service charge \(( y )\).
• C) There is sufficient evidence (at \(\alpha = .05\) ) to conclude that service charge \(( y )\) is positively linearly related to sales revenue \(( x )\).
• D) For every \(\$ 1\) million increase in sales revenue \(( x )\), we expect a service charge \(( y )\) to increase $.064.

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Definitions:

Multinational Company

A corporation that operates in multiple countries, managing production or delivering services across international boundaries.

Complex Process

A complicated series of actions or steps that involve multiple factors or considerations and usually require detailed planning and execution.

Multimedia

The use of multiple forms of media, such as text, audio, images, animations, or video, to convey information.

Unethical Message

A communication that is dishonest, manipulative, or otherwise morally questionable.