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# SCENARIO 13-1 A large national bank charges local companies for using their services. A bank ofcial reported the results of a regression analysis designed to

SCENARIO 13-1 A large national bank charges local companies for using their services. A bank ofcial 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 t the model: Y; =0+lXi+8i The results of the simple linear regression are provided below. i? = 2, 700 + 20X, SE = 65, two-tail p value = 0.034 (for testing l) Referring to Scenario 13-1, interpret the estimate of 0', the standard deviation of the random error term (standard error of the estimate) in the model. a) About 95% of the observed service charges fall within $65 of the least squares line. b) About 95% of the observed service charges equal their corresponding predicted values. 0) About 95% of the observed service charges fall within $130 of the least squares line. d) For every $1 million increase in sales revenue, we expect a service charge to increase $65

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