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 burning 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. In words, what is the correct alternative hypothesis to determine if the distance the burning house is to the nearest fire station is a significant predictor of damage to a burning house? Click the icon to view the regression analysis. Choose the correct answer below. O A. The number of miles the burning house is from the nearest fire station does not help explain the amount of damage to the burning house. OB. Amount of damage to the burning house does not help explain the number of miles the burning house is from the nearest fire station ° C. The number of miles the burning house is from the nearest fire station helps explain the amount of damage to the burning house. O D Amount of damage to the burning house helps explain the number of miles the burning ho seis from the nearest re station.

Explanation / Answer

Option B is Correct. Amount of damage to the burning house does not help explain the no of miles the burning house is from the nearest station because R Squared value is too low

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