Use the Following Information to Answer the Question

question 5

Multiple Choice

Use the following information to answer the question. A random sample of 30 couples who were also new home owners were asked to report the cost of their first house and their combined age when they married. The output of a regression analysis for predicting home cost from combined age is shown. Assume that the conditions of the linear regression model are satisfied.

-What is the slope of the regression line? Choose the statement that is the correct interpretation of the slope in context.

• A)The slope is 2122.75. On average, for each additional year in combined age, home cost is about $2,122.75 higher, in the sample.
• B)The slope is 73.74. On average, for couples with a combined age over 73.74, the home cost is an additional $2,122.75 per year over 73.74.
• C)The slope is 2122.75. On average, for each additional $2,122.75 in home cost, the combined age is about 1 year higher, in the sample.
• D)The slope is 73.74. On average, for each additional year in combined age, the home cost is about $2,122.75 higher, in the sample.

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Definitions:

Base Amount

The initial sum of money used as a reference or starting point for calculations, often related to financial calculations or transactions.

Sources of Cash

Various origins from which a business or individual can obtain funds, including operations, financing, and investing activities.

Use of Cash

Describes the various ways a company or an individual applies their available cash, including operations, investments, and financing activities.

Price/Earnings Ratio

A valuation metric that compares a company's current share price to its per-share earnings, often used to gauge if a stock is over or undervalued.