Consider the Following to Answer the Question(s) Below

question 3

Multiple Choice

Consider the following to answer the question(s) below:
A regression was performed to predict the selling price of a yacht in thousands of dollars based on the number of rooms it had, its age (years) , and its length (feet) . The R2 is 68.45%. The equation is given here.
Selling Price = 120.51 + 7.46 Rooms - 1.78 Age + 2.83 Length
-What does the coefficient of Rooms mean in the context of the regression model?

• A) The average selling price will increase by $7,460 for every additional room for yachts with the same length and age.
• B) The average selling price will increase 7.46 times for every additional room.
• C) Every additional room will mean the selling price will increase by 7.46%, all other things being equal.
• D) There is always a decrease in selling price of $7,460 for every additional room on a yacht.
• E) The number of rooms is the most important explanatory variable since it is the largest.

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Definitions:

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 (impossible) and 1 (certain).

Foreclosed

The legal process by which an owner's right to a property is terminated, usually due to failure to meet mortgage payment obligations.

Vickrey Auction

A sealed-bid auction where the highest bidder wins but pays the second-highest bid price.

Willingness To Pay

The maximum amount an individual is ready to spend for a good or service.