Referring to Scenario 12-1, interpret the estimate of BO, the Y- intercept of th

Question

Referring to Scenario 12-1, interpret the estimate of BO, the Y- intercept of the line. SCENARIO 12-1 A large national bunk charges local companins for using their services. A bank official reported the results of a regression analysis dusigned to predict the bank's charges () -measured in dollars per month for services rendered to local companies: Oine independent variable uwed to prediet service charges to a company is the compuny's ales revenue () " measured in millions of dollars Data for 21 companies who use the bank 's services were used to fit the model: The results of the simple inear rswrssion are provided 7--2,700-20.x, s, -65, two-ail p value-0.034 (for testing B) e Minimized View Al companies will be charged at least: $2,700 by the bankA There is no practical interpretation since a sales revenue of S0 is a nonsensical value About 95% of the observed service charges fall within S2, 700 of the least squares line. For every $1 million increase in sales revenue, we expect a service charge to decrease $2,700.

Explanation / Answer

Ans:

Given that

Regression equation:

y'=-2700+20X

y-intercept=-2700

when x=0

y'=-2700

it means that all companies will be charged atleast 2700 by the bank.

First option is correct.

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