Exhibit 15-8 The Following Estimated Regression Model Was Developed Relating Yearly Income

question 55

Multiple Choice

Exhibit 15-8
The following estimated regression model was developed relating yearly income (y in $1,000s) of 30 individuals with their age (x₁) and their gender (x₂) (0 if male and 1 if female) . = 30 + 0.7x₁ + 3x₂
Also provided are SST = 1,200 and SSE = 384.
-In a residual plot that does not suggest we should challenge the assumptions of our regression model, we would expect to see

• A)a horizontal band of points centered near zero
• B)a widening band of points
• C)a band of points having a slope consistent with that of the regression equation
• D)a parabolic band of points

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Definitions:

Effective Annual Rate

The actual interest rate an investment, loan, or savings account will yield after accounting for compounding.

Rate

The percentage or proportion of a specific quantity or value, often used in contexts like interest rates, return rates, or growth rates.

Compounded Monthly

The process of calculating interest on an investment or loan on a monthly basis, where the accrued interest is added to the principal.

Assisted Living

A residential option for seniors who need help with some daily activities like meals, transportation, and personal care.