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

question 129

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,the observed value of the F-statistic is given on the printout as 25.432.What are the degrees of freedom for this F-statistic?

• A)25 for the numerator,2 for the denominator
• B)2 for the numerator,23 for the denominator
• C)23 for the numerator,25 for the denominator
• D)2 for the numerator,25 for the denominator

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Definitions:

Convertible Bond

A type of bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.

Serial Bond

A serial bond is a type of bond that matures in installments over a period rather than in a single lump-sum at the end of its term.

Fiscal Year

An accounting period of 12 months used by organizations for financial reporting and budgeting, distinct from the calendar year.

Premium Amortization

The process of gradually reducing the premium paid over the par value of a bond or other financial instrument over its life.