More real estate Consider the Albuquerque home sales from Exercise 29 again. The regression analysis gives the model Price 47.82 + 0.061 Size. a) Explain what the slope of the line says about housing prices and house size. b) What price would you predict for a 3000-square-foot house in this market? c) A real estate agent shows a potential buyer a 1200-square- foot home, saying that the asking price is $6000 less than what one would expect to pay for a house of this size. What is the asking price, and what is the $6000 called?
More real estate Consider the Albuquerque home sales from Exercise 29 again. The regression analysis gives the model Price 47.82 + 0.061 Size. a) Explain what the slope of the line says about housing prices and house size. b) What price would you predict for a 3000-square-foot house in this market? c) A real estate agent shows a potential buyer a 1200-square- foot home, saying that the asking price is $6000 less than what one would expect to pay for a house of this size. What is the asking price, and what is the $6000 called?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:More real estate Consider the Albuquerque home sales from
Exercise 29 again. The regression analysis gives the model
Price = 47.82 + 0.061 Size.
a) Explain what the slope of the line says about housing prices
and house size.
b) What price would you predict for a 3000-square-foot house
in this market?
c) A real estate agent shows a potential buyer a 1200-square-
foot home, saying that the asking price is $6000 less than
what one would expect to pay for a house of this size. What
is the asking price, and what is the $6000 called?
Expert Solution
Step 1
The regression analysis is helpful in predicting the dependent variable due to changes in independent variables.
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