TABLE 13-1 A Large National Bank Charges Local Companies for Using Their

question 26

Multiple Choice

TABLE 13-1
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 charges to a company is the company's sales revenue (X) measured in millions of dollars. Data for 21 companies who use the bank's services were used to fit the model:
Yᵢ = β₀ + β₁Xi + Eᵢ
The results of the simple linear regression are provided below.

-Referring to Table 13-1, interpret the p-value for testing whether β₁ exceeds 0.

• A) There is sufficient evidence (at the α = 0.05) to conclude that sales revenue (
• X) is a useful linear predictor of service charge (
• Y).
• B) There is insufficient evidence (at the α = 0.10) to conclude that sales revenue (
• X) is a useful linear predictor of service charge (
• Y).
• C) Sales revenue (
• X) is a poor predictor of service charge (
• Y).
• D) For every $1 million increase in sales revenue, you expect a service charge to increase $0.034.

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