An agent for a residential real estate company in a large city would like to be

Question

An agent for a residential real estate company in a large city would like to be able to predict the monthly rental cost of apartments based on the size of the apartment. Data for a sample of 25 apartments in a particular neighborhood are provided in the worksheet Apartments in the Excel workbook Apartments.xlsx.

At the .05 level of significance determine if the correlation between rental cost and apartment size is significant.

Rent Size 950 850 1600 1450 1200 1085 1500 1232 950 718 1700 1485 1650 1136 935 726 875 700 1150 956 1400 1100 1650 1285 2300 1985 1800 1369 1400 1175 1450 1225 1100 1245 1700 1259 1200 1150 1150 896 1600 1361 1650 1040 1200 755 800 1000 1750 1200

Explanation / Answer

A.No, there is not a statistically significant linear relationship between monthly rental cost and apartment size, because the sample correlation coefficient is less than .95.

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