A Realtor is interested in modeling the selling prices of houses in a metropolit
ID: 3204041 • Letter: A
Question
A Realtor is interested in modeling the selling prices of houses in a metropolitan area. Three independent variables are selected to use in the model and are defined as:
Y = the selling price in thousands of dollars
X1 = the square footage of a house
X2 = the number of bedrooms in a house
X3 = the age of a house in years
^ Now write the regression model to be used in predicting the selling price for a house ^
A hotel manager is concerned about hotel room rates for a large chain of hotels. The variables to be used in this research is defined as follows:
Y = the daily rate of a room
X1 = the population of the city
X2 = the rating of the hotel (1 star to 5 stars)
X3 = the number of rooms in the hotel
X4 = the number of hotels in the city
^ Now write the regression model to be used in predicting the room rates for this hotel ^
AND FIND ASSUMPTIONS ABOUT THE RANDOM ERROR e:
The error terms are _____ in the probabilistic sense.
The error terms have a _____ probability distribution.
Explanation / Answer
Y = the selling price in thousands of dollars
X1 = the square footage of a house
X2 = the number of bedrooms in a house
X3 = the age of a house in years
the regression model to be used in predicting the selling price for a house
Y = B0 + X1*B1 +X2*B2 + X3*B3
_____________________________________________________________
Y = the daily rate of a room
X1 = the population of the city
X2 = the rating of the hotel (1 star to 5 stars)
X3 = the number of rooms in the hotel
X4 = the number of hotels in the city
the regression model to be used in predicting the room rates for this hotel :
Y = B0 + X1*B1 +X2*B2 + X3*B3+X4*B4
ASSUMPTIONS ABOUT THE RANDOM ERROR e:
1) The error terms are independent.
2) Normal probability distribution
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