A Real Estate Analyst Believes That the Three Main Factors

question 90

Multiple Choice

A real estate analyst believes that the three main factors that influence an apartment's rent in a college town are the number of bedrooms, the number of bathrooms, and the apartment's square footage. For 40 apartments, she collects data on the rent (y, in $) , the number of bedrooms (x₁) , the number of bathrooms (x₂) , and its square footage (x₃) . She estimates the following model: Rent = β₀ + β₁Bedroom + β₂Bath + β₃Sqft + ε. The following table shows a portion of the regression results. When testing whether the explanatory variables are jointly significant at the 5% level, she ________.

• A) rejects H₀, and concludes that the explanatory variables are jointly significant
• B) does not reject H₀, and concludes that the explanatory variables are jointly significant
• C) rejects H₀, and cannot conclude that the explanatory variables are jointly significant.
• D) does not reject H₀, and cannot conclude that the explanatory variables are jointly significant

---

Definitions:

Like-kind Exchange

A tax-deferred transaction allowing for the disposal of an asset and the acquisition of another similar asset without generating a tax liability from the sale of the first asset.

Installment Method

A tax procedure that allows the taxpayer to spread the income and taxes owed on the sale of property over the period in which the payments are received.

Gross Profit Percentage

A financial ratio showing the proportion of money left over from revenues after accounting for the cost of goods sold.

Contract Price

The total amount agreed upon in a contract for the sale of goods, services, or property.