Instruction 13-6
One of the Most Common Questions of Prospective

question 179

Multiple Choice

Instruction 13-6
One of the most common questions of prospective house buyers pertains to the average cost of heating in dollars (Y) .
To provide its customers with information on that matter,a large real estate firm used the following 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Celsius (X₁) ,the amount of insulation in cm (X₂) ,the number of windows in the house (X₃) ,and the age of the furnace in years (X₄) .Given below are the Microsoft Excel outputs of two regression models.
$\begin{array}{lr}{\text { Model 1 }} \\\hline{\text { Regression Statistics }} \\\hline \text { R Square } & 0.8080 \\\text { Adjusted R Square } & 0.7568 \\\text { Observations } & 20\end{array}$
ANOVA
$\begin{array}{lrrrrr} & d f & {\text { SS }} & M S & F & \text { Significance } F \\\hline \text { Regression } & 4 & 169503.4241 & 42375.86 & 15.7874 & 2.96869 \mathrm{E}-05 \\\text { Residual } & 15 & 40262.3259 & 2684.155 & & \\\text { Total } & 19 & 209765.75 & &\end{array}$

$\begin{array}{lrrrrrrr} & \text { Coefficients } & \text { Standard Error } &{\text { t Stat }} & \text { P-value } & \text { Lower 90.0\% } & \text { Upper 90.0\% } \\\hline \text { Intercept } & 421.4277 & 77.8614 & 5.4125 & 7.2 \mathrm{E}-05 & 284.9327 & 557.9227 \\\mathrm{X}_{1} \text { (Temperature) } & -4.5098 & 0.8129 & -5.5476 & 5.58 \mathrm{E}-05 & -5.9349 & -3.0847 \\\mathrm{X}_{2} \text { (Insulation) } & -14.9029 & 5.0508 & -2.9505 & 0.0099 & -23.7573 & -6.0485 \\\mathrm{X}_{3} \text { (Windows) } & 0.2151 & 4.8675 & 0.0442 & 0.9653 & -8.3181 & 8.7484 \\\mathrm{X}_{4} \text { (Furnace Age) } & 6.3780 & 4.1026 & 1.5546 & 0.1408 & -0.8140 & 13.5702\end{array}$ $\begin{array}{l}\text { Model } 2\\\begin{array}{lr}\hline {\text { Regression Statistics }} \\\hline \text { R Square } & 0.7768 \\\text { Adjusted R } & \\\text { Square } & 0.7506 \\\text { Observations } & 20 \\\hline\end{array}\end{array}$
ANOVA
$\begin{array}{lrrrrrr}\hline & d f & {\text { SS }} & M S & F & \text { Significance } F \\\hline \text { Regression } & 2 & 162958.2277 & 81479.11 & 29.5923 & 2.9036 \mathrm{E}-06 \\\text { Residual } & 17 & 46807.5222 & 2753.384 & & \\\text { Total } & 19 & 209765.75 & &\end{array}$

$\begin{array}{lrrrrrr} & \text { Coefficients } & \text { Standard Error } & \text { tStat } & \text { P-value } & \text { Lower 95\% } & \text { Upper 95\% } \\\hline \text { Intercept } & 489.3227 & 43.9826 & 11.1253 & 3.17 \mathrm{E}-09 & 396.5273 & 582.1180 \\\mathrm{X}_{1} \text { (Temperature) } & -5.1103 & 0.6951 & -7.3515 & 1.13 \mathrm{E}-06 & -6.5769 & -3.6437 \\\mathrm{X}_{2} \text { (Insulation) } & -14.7195 & 4.8864 & -3.0123 & 0.0078 & -25.0290 & -4.4099\end{array}$
-Referring to Instruction 13-6,what is the 90% confidence interval for the expected change in heating costs as a result of a 1 degree Celsius change in the daily minimum outside temperature using Model 1?

• A)[6.24,2.78]
• B)[2.37,15.12]
• C)[5.94,3.08]
• D)[6.58,3.65]

Learn the basics and important components of Java programming.

Understand object-oriented design and programming concepts.

Understand the rules for evaluating mixed expressions and type conversion in Java.

Demonstrate knowledge of input operations using Scanner objects.

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Definitions:

Compounded Nominal Annual Rate

The rate of interest for one year, without taking inflation into account, which is compounded at specified intervals within that year.

Effective Rate

The actual interest rate on an investment or loan, taking into account the compounding of interest over time.

Effective Rate

The actual rate of interest earned or paid on an investment or loan over a specified timeframe, taking into account the effect of compounding.

Finance Company

A business that provides loans to individuals or corporations, apart from traditional banks, often focusing on areas such as auto financing, personal loans, and leasing.