SCENARIO 18-2
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 ( X 1 ), the amount of insulation in inches ( X 2 ), the number of windows in the house ( X 3 ), and the age of the furnace in years ( X 4 ). Given below are the EXCEL outputs of two regression models.

-Referring to Scenario 18-1,what fraction of the variability in house size is explained by income,size of family,and education?
A)27.0%
B)33.4%
C)74.8%
D)86.5%

Question

SCENARIO 18-2
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 ( X 1 ), the amount of insulation in inches ( X 2 ), the number of windows in the house ( X 3 ), and the age of the furnace in years ( X 4 ). Given below are the EXCEL outputs of two regression models.

-Referring to Scenario 18-1,what fraction of the variability in house size is explained by income,size of family,and education? 
A)27.0% 
B)33.4% 
C)74.8% 
D)86.5%

Quizplus · Accepted Answer

The fraction of the variability in house size explained by income, size of family, and education is represented by the coefficient of determination (R^2) in a multiple regression analysis. The correct answer, 74.8%, indicates that these variables together explain 74.8% of the variance in house size, making it the most plausible choice given the options.

SCENARIO 18-2 One of the Most Common Questions of Prospective House Buyers