SCENARIO 14-6 One of the Most Common Questions of Prospective House Buyers

question 161

Multiple Choice

SCENARIO 14-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) . To provide its customers with information on that matter, a large real estate firm used the following 2 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X₁ ) and the amount of insulation in inches ( X ₂ ) . Given below is EXCEL output of the regression model.



Also SSR (X₁ | X₂) = 8343.3572 and SSR (X₂ | X₁) = 4199.2672
-Referring to Scenario 14-5,at the 0.01 level of significance,what conclusion should the microeconomist reach regarding the inclusion of Capital in the regression model?

• A)Capital is significant in explaining corporate sales and should be included in the model because its p-value is less than 0.01.
• B)Capital is significant in explaining corporate sales and should be included in the model because its p-value is more than 0.01.
• C)Capital is not significant in explaining corporate sales and should not be included in the model because its p-value is less than 0.01.
• D)Capital is not significant in explaining corporate sales and should not be included in the model because its p-value is more than 0.01.

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Definitions:

Assigned

Transferred or allocated to a party or for a specific purpose.

Repossess

The act of taking back goods or property by a seller or lender from the buyer or borrower, usually due to failure to meet the terms of the sale or loan agreement.

Deficit

A financial situation where expenditures exceed revenue.

Security Agreement

A security agreement is a legal document that provides a lender a security interest in a specified asset or property pledged as collateral, detailing the terms regarding the secured transaction.