bank charges local for using its A bank official he results of a to predict the

Question

bank charges local for using its A bank official he results of a to predict the bank's charges (y), measured in dollars per month, for services rendered to local companies. One independent variable used to predict the he company's sales revenue (x) simple linear regression are provided below. Interpret the estimate of . the y-intercept of the line in $ million. Data for 21 who use the bank's services were used to fit the model E(y).0+pfKThe results ofthe y 2,700+20x since a sales revenue of $0 is a O A. There is no practical O B. All companies will be charged at least $2,700 by the bank. O C. About 95% of the observed service charges fall within $2.700 of the least squares line. D. For every $1 million increase in sales revenue, we expect a service charge to increase $2.700.

Explanation / Answer

Q1. B) ALl companies will be charged $2,700 by the bank

(Even if the x value is 0, the y value = 2700 + 0 = $2700)

Q2. B) We are 95% confident that service charge (y) will increase between $15 and $25 for every $1 million increase in sales revenue (x)

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