TABLE 14-6
One of the most common questions of prospective house buyers pertains to the 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 Fahrenheit (X₁) the amount of insulation in inches (X₂), the number of windows in the house (X₃), and the age of the furnace in years (X₄). Given below are the Excel outputs of two regression models.
Model 1

Model 2

-Referring to Table 14-6, what is the 90% confidence interval for the expected change in heating costs as a result of a 1 degree Fahrenheit change in the daily minimum outside temperature using Model 1?
A) [-6.58, -3.65]
B) [-6.24, -2.78]
C) [-5.94, -3.08]
D) [-2.37, 15.12]

Question

TABLE 14-6
One of the most common questions of prospective house buyers pertains to the 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 Fahrenheit (X₁) the amount of insulation in inches (X₂), the number of windows in the house (X₃), and the age of the furnace in years (X₄). Given below are the Excel outputs of two regression models.
Model 1
  
Model 2
 
-Referring to Table 14-6, what is the 90% confidence interval for the expected change in heating costs as a result of a 1 degree Fahrenheit change in the daily minimum outside temperature using Model 1?
A) [-6.58, -3.65] 
B) [-6.24, -2.78] 
C) [-5.94, -3.08] 
D) [-2.37, 15.12]

Quizplus · Accepted Answer

The confidence interval for the expected change in heating costs is calculated based on the regression model's coefficient for the temperature variable and its standard error. Option C provides a plausible range for this interval.

TABLE 14-6 One of the Most Common Questions of Prospective House Buyers