Kizspy Question: 42
(Choose 1 answer)
(See picture)
A. All companies will be charged at least $2,700 by the bank.
B. There is no practical interpretation since a sales revenue of $0 is a nonsensical value.
C. About 95% of the observed service charges fall within $2,700 of the least squares line.
D. For every $1 million increase in sales revenue, we expect a service charge to decrease $2,700.
A large national bank charges local companies for using their services. A
bank official reported the results of a regression analysis designed to predict
the bank's charges (Y) -- measured in dollars per month -- for services
rendered to local companies. One independent variable used to predict
service charges to a company is the company's sales revenue (X) -- measured
in millions of dollars. Data for 21 companies who use the bank's services
were used to fit the model: Y₁ = ẞo + B₁Xi + εi
The results of the simple linear regression are provided below.
Ŷ -2,700+ 20X, Syx
65, two-tail p value = 0.034 (for testing ẞ₁).
Interpret the estimate of Bo, the Y-intercept of the line.
