1. The president of a national real estate company wanted toknow why certain branches of the company outperformed others. Hefelt that the key factors in determining total annual sales ($ inmillions) were the advertising budget (in $1000s) X₁ andthe number of sales agents X₂. To analyze the situation,he took a sample of 25 offices and ran the following regression.The computer output is below.

            PREDICTOR            COEF             STDEV                       P-VALUE

            Constant                    -19.47             15.84                          0.2422

            X₁                                0.1584            .0561                          0.0154

            X₂                                0.9625            .7781                          0.2386

            S_e=7.362                             Rsquared =.524                             SigF = 0.0116

(a)What are the anticipated signs for each of the independentvariables in the model?

  

(b) Interpret the slope coefficient associated with the numberof real estate agents.

(c) Test to determine if a positive relationship exists betweenthe advertising spending and annual sales. Use alpha = .05.

(d) Can we conclude that this model explains a significantportion of the variation in annual sales? Use alpha =.01.