Consider the Following to Answer the Question(s) Below

question 11

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
-Which of the following statements is true?

• A) For a given Age and Length, every extra room is associated with an additional $7,460 in the average selling price of the yacht.
• B) The model fits 68.45% of the data.
• C) Every additional foot of Length causes the selling price of the yacht to increase 2.83 times.
• D) The price of a yacht decreases 1.78 times with every year it ages.
• E) The selling price of an individual yacht cannot be predicted with this model.

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Definitions:

C Rating

A rating given to a security indicating significant risk; it's one of the lower ratings in the grading scale of investments.

Catastrophe Bonds

Insurance-linked securities issued by insurance companies to transfer major risks from the issuer to investors, typically used for natural disaster risks.

Asset-Backed Bonds

Bonds that are secured by a pool of assets, such as loans or receivables, which generate the cash flow to pay bondholders.

TIPS

Treasury Inflation-Protected Securities, a type of U.S. Treasury bond designed to help investors protect against inflation.