A realtor in Oregon found that the selling price (in thousand dollars) of the house and...

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A realtor in Oregon found that the selling price (in thousanddollars) of the house and the age of the house (how long since itwas built) was highly correlated (r=–0.6). She collected some dataand derived the following regression model.
Y = 260 – 2.5X
(1) Given above information, what would be the expected sellingprice for a house that was build 20 years ago?
(2) If another house is 8 years newer than the one mentioned in(1), will be the selling price higher or lower, and by howmuch?
Select one:
a. (1) 210 thousand dollars; (2) 8 thousand dollars lower.
b. (1) 210 thousand dollars; (2) 8 thousand dollars higher.
c. (1) 310 thousand dollars; (2) 12 thousand dollars higher.
d. (1) 240 thousand dollars; (2) 20 thousand dollars lower.
e. (1) 210 thousand dollars; (2) 20 thousand dollars higher.

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3.9 Ratings (384 Votes)

Solution Correlation refers to the degree of relation between two variables A zero correlation between two variables means that they are not related and any change in the value of one variable will not impact the other variables value A negative correlation represents an indirect relation between the two See Answer

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