The following table provides information on the living area (in square feet) and price (in thousands of dollars) of 10 randomly selected houses listed for sale in a city.
a. Find the least squares regression line ŷ = a + bx. Take living area as an independent variable and price as a dependent variable.
b. Give a brief interpretation of the values of a and b.
c. Compute r and r2 and explain what they mean.
d. Predict the price of a house with 2700 square feet of living area.
e. Compute the standard deviation of errors.
f. Construct a 99% confidence interval for B.
g. Testing at a 1% significance level, can you conclude that B is different from zero?
h. Using α = .01, can you conclude that the correlation coefficient is different from zero?

  • CreatedAugust 25, 2015
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