A Large National Bank Charges Local Companies for Using Their $$E ( y ) = \beta _ { 0 } + \beta _ { 1 } x$$

question 113

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 bankʹs 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 companyʹs sales revenue (x) , measured in $ million. Data for 21
Companies who use the bankʹs services were used to fit the model $$E ( y ) = \beta _ { 0 } + \beta _ { 1 } x$$
Suppose a $95 \%$ confidence interval for $\beta _ { 1 }$ is $( 15,25 )$ . Interpret the interval.

• A) We are \(95 \%\) confident that sales revenue \(( x )\) will increase between \(\$ 15\) and \(\$ 25\) million for every \(\$ 1\) increase in service charge \(( y )\).
• B) We are \(95 \%\) confident that the mean service charge will fall between \(\$ 15\) and \(\$ 25\) per month.
• C) We are \(95 \%\) confident that service charge \(( y )\) will increase between \(\$ 15\) and \(\$ 25\) for every \(\$ 1\) million increase in sales revenue \(( x )\).
• D) We are \(95 \%\) confident that service charge \(( y )\) will decrease between \(\$ 15\) and \(\$ 25\) for every \(\$ 1\) million increase in sales revenue \(( x )\).

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Definitions:

Purchase Orders

Purchase orders are formal documents issued by a buyer to a seller, specifying types, quantities, and agreed prices for products or services.

Financial Statements

Comprehensive reports that detail an entity's financial activity and current financial condition, including the balance sheet, income statement, and cash flow statement.

Customize Features

The ability or option to modify or personalize specific functionalities of a software or system to suit individual or business needs.

Accounts Payable

Amounts owed by a business to its suppliers or vendors for goods and services received but not yet paid for.