A Real Estate Analyst Believes That the Three Main Factors

question 72

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 Bedroom is significant at the 5% significance level, she ________.

• A) rejects H₀: β₁ = 0, and concludes that the number of bedrooms significantly influences rent
• B) does not reject H₀: β₁ = 0, and concludes that the number of bedrooms significantly influences rent
• C) rejects H₀: β₁ = 0, and cannot conclude that the number of bedrooms significantly influence rent
• D) does not reject H₀: β₁ = 0, and cannot conclude that the number of bedrooms significantly influence rent

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