A Realtor Is Trying to Predict the Selling Price of Houses

question 13

Multiple Choice

A realtor is trying to predict the selling price of houses in Greenville (in thousands of dollars) as a function of Size (measured in thousands of square feet) and whether or not there is a fireplace (FP is 0 if there is no fireplace, 1 if there is a fireplace) . Part of the regression output is provided below, based on a sample of 20 homes. Some of the information has been omitted. $$\begin{array} { l r r r r } \hline \text { Variable } & \text { Coefficients } & \text { Standard Error } & \text { t-Stat } & \text { P-value } \\\hline \text { Intercept } & 128.93746 & 2.6205302 & 49.203 & 8.93 \mathrm { E } - 20 \\\text { Size } & & 1.2072436 & 11.439 & 2.09 \mathrm { E } - 09 \\\text { FP } & 6.47601954 & 1.9803612 & 3.27 & 0.004512 \\\hline\end{array}$$ Which statement is supported by the regression output?

• A)At ? = .05, FP is not a significant predictor in a two-tailed test.
• B)A fireplace adds around $6476 to the selling price of the average house.
• C)A large house with no fireplace will sell for more than a small house with a fireplace.
• D)FP is a more significant predictor than Size.

---

Definitions:

U.S. Poverty Rate

The proportion of the population living in households with income below the official poverty threshold as defined by the United States government.

Great Recession

A period of global economic downturn that took place roughly from 2007 to 2009, marked by high unemployment, falling housing prices, and severe financial stress.

Poverty Rate

The Poverty Rate is the percentage of the population that lives below the poverty line, indicating the level of poverty within a country or region.

College Graduates

Individuals who have completed a degree program at a college or university, obtaining qualifications such as a bachelor's, master's, or doctoral degree.