Solution-Regression model for the appraisal value

Regression model for the appraisal value

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Reference no: EM131069199

An investor plans to develop a regression model for the appraisal value (in thousands of dollars) of property in her city (Y) based on 5 numerical variables:

Y = β₀ + β₁X₁ + β₂X₂ + β₃X₃ + β₄X₄ + β₅X₅ + ε

The investor would like to test whether or not the model has any significance. That is, she would like to test the hypotheses:

H₀: β₁ = β₂ = β₃ = β₄ = β₅ = 0

H_A: not all β_j are zero

A sample of 30 items are drawn and the data is used to create the prediction equation:

y^ = b₀ + b₁x₁ + b₂x₂ + b₃x₃ + b₄x₄ + b₅x₅

The regression sum of squares (SSR) is calculated to be 384.7 and the error sum of squares (SSE) is calculated to be 549.5. An F test is conducted to test the above hypotheses.

a) Calculate the test statistic (F) for this test. Give your answer to 2 decimal places.

F =

b) With a 99% level of confidence, the investor cancannot reject the null hypothesis

Reference no: EM131069199

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Regression model for the appraisal value

Reference no: EM131069199

Reference no: EM131069199

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