A Real Estate Analyst Believes That the Three Main Factors

question 81

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. Which of the following are the hypotheses to test if the explanatory variables Bath and Sqft are jointly significant in explaining Rent?

• A) H₀: β₂ = β₃ = 0; H_A: both of the coefficients are nonzero.
• B) H₀: β₂ = β₃ = 0; H_A: at least one of the coefficients is zero.
• C) H₀: β₂ = β₃ = 0; H_A: at least one of the coefficients is nonzero.
• D) H₀: β₂ = β₃ = 0; H_A: both of the coefficients are zero.

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Definitions:

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