SCENARIO 18-2 One of the Most Common Questions of Prospective House Buyers

question 4

Multiple Choice

SCENARIO 18-2
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 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X₁ ) , the amount of insulation in inches ( X ₂ ) , the number of windows in the house ( X₃ ) , and the age of the furnace in years ( X ₄ ) . Given below are the EXCEL outputs of two regression models.


-Referring to Scenario 18-1,what is the value of the calculated F test statistic that is missing from the output for testing whether the whole regression model is significant?

• A)0.0001
• B)0.0299
• C)0.726
• D)45.5340

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Definitions:

Contagion

A pattern in which stock markets have become increasingly interconnected around the world and markets in different countries have begun reacting similarly.

Net Present Value

A financial metric that calculates the present value of net cash flows (inflows minus outflows) over a period, used for assessing the profitability of an investment.

Mutual Funds

Shareholder-financed investment schemes that are professionally overseen and involve trading in a variety of holdings.

Weighted Average Cost

A calculation that takes into account the varying costs of different components of a product or service, weighted by their respective proportions.