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:

Unemployment Rate

The unemployment rate is the percentage of the labor force that is jobless and actively seeking employment.

Null Hypothesis

A default hypothesis that there is no effect or no difference, and it is the hypothesis that researchers typically seek to disprove or reject through statistical tests.

Alternative Hypothesis

The hypothesis that proposes a significant difference, effect, or relationship between variables, tested against the null hypothesis in statistical analysis.

Canada

A country in North America known for its vast landscapes, multicultural cities, and as the second-largest country by land area in the world.