Chapter 26, Problem 26.16CYS

To determine

The equation of the least-squares regression line for predicting selling price from appraised value.

Answer to Problem 26.16CYS

Correct answer:

Option (a) $\text{price}=100.2+1.2186\times \text{appraised value}$.

Explanation of Solution

Reason for the correct answer:

From the given MINITAB output, the value of the slope (b) is 1.2186, and the value of the intercept (a) is 100.2. Hence, the equation of the least-squares regression line for predicting the selling price from the appraised value is $\text{price}=100.2+1.2186\times \text{appraised value}$.

Reason for the incorrect answers:

Option (b) and option (c) are incorrect because from the given MINITAB output, the value of the slope (b) is 1.2186 and the value of the intercept (a) is 100.2.

Conclusion:

Therefore, the correct option is (a).

Statistics Concept Introduction

Introduction:

The formula for regression equation is derived as follows:

$\widehat{y}=a+bx$

Where, the slope is denoted as b, (which interprets the amount by which y changes, when x increases by a unit), and the intercept is denoted as a (which interprets the value of y, when $x=0$).