A Real Estate Company Is Analyzing the Selling Prices of Residential

question 36

Multiple Choice

A real estate company is analyzing the selling prices of residential homes in a given community.140 homes that have been sold in the past month are randomly selected and their selling prices are recorded.The statistician working on the project has stated that in order to perform various statistical tests,the data must be distributed according to a normal distribution.In order to determine whether the selling prices of homes included in the random sample are normally distributed,the statistician divides the data into 6 classes of equal size and records the number of observations in each class.She then performs a chi-square goodness of fit test for normal distribution.The results are summarized in the following table.
Goodness of Fit Test $$\begin{array} { r | r | r | r | r } \text { Observed } & \text { Expected } & \mathrm { O } - \mathrm { E } & ( \mathrm { O } - \mathrm { E } ) ^ { 2 } \mathrm { E } & \% \text { of chi-square } \\\hline 10 & 3.192 & 6.808 & 14.520 & 64.81 \\\hline 23 & 19.026 & 3.974 & 0.830 & 3.70 \\\hline 37 & 47.782 & - 10.782 & 2.433 & 10.86 \\\hline 40 & 47.782 & - 7.782 & 1.267 & 5.66 \\\hline 27 & 19.026 & 7.974 & 3.342 & 14.92 \\\hline 3 & 3.192 & - 0.192 & 0.012 & 0.05 \\\hline 140 & 140.000 & 0.000 & 22.404 & 100.00 \\\hline & & & & \\\hline 22.40 & \text { chi-square } & & & \\\hline .0001 & \text { p-value } & & &\end{array}$$
At a significance level of .05,we:

• A)Reject H₀;conclude the residential home selling prices are not distributed according to a normal distribution.
• B)Do not reject H₀;conclude the residential home selling prices are not distributed according to a normal distribution.
• C)Reject H₀;conclude the residential home selling prices are distributed according to a normal distribution.
• D)Do not reject H₀;conclude the residential home selling prices are distributed according to a normal distribution.

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Definitions:

Domestic Output

The overall value of goods and services produced domestically in a country within a set period.

Gini Ratio

A benchmark for evaluating the deviation of income distribution in a group, where a value of 0 means entirely equal distribution and 1 illustrates the highest level of inequality.

Measured

Measured refers to the process of quantifying or evaluating something through systematic observation or calculation.

Income Inequality

The unequal distribution of annual or lifetime income among individuals or households in an economy.