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

question 198

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, a 95% confidence interval for β₁ is (15, 30) . Interpret the interval.

• A) You are 95% confident that the mean service charge will fall between $15 and $30 per month.
• B) You are 95% confident that the sales revenue (
• X) will increase between $15 and $30 million for every $1 increase in service charge (
• Y).
• C) You are 95% confident that mean service charge (
• Y) will increase between $15 and $30 for every $1 million increase in sales revenue (
• X).
• D) At the α = 0.05 level, there is no evidence of a linear relationship between service charge (
• Y) and sales revenue (