A fire insurance company wants to examine the relationship between the amount of

Question

A fire insurance company wants to examine the relationship between the amount of fire damage in major residential fires to the distance between the burning house and the nearest fire station. A sample of 15 recent fires in a particular city was taken. The amount of damage to the house (in thousands of dollars) and the distance from the buming house to the nearest fire station (in miles) was recorded. Part of the output from a simple linear regression analysis is provided. Assume all conditions are met for simple linear regression inference. What is the correct method to calculate the test-statistic for the hypothesis test to determine if distance a burming house is from the nearest fire station is a significant predictor of amount of damage to the house? Cilick the icon to view the regression analysis. Choose the correct answer below. 3.554 1.663 16.301 3.554 3.554 9.8101 16.301 6.015 OA. C. 3.554 E. 9.8101/15

Explanation / Answer

right choicei is A.3.554/1.663

here there are n=15 observation and we are fitting the equation y(Damage)=a(constant)+b*x(Distance)

and we use t-test for significance of slope b and statistic t=b/SE(b)=3.554/1.663=2.137 with n-2=15-2=13 df

p-value=0.0522 ( using ms-excel =TDIST(2.137,13,2)

T=2.137 P=0.0522

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