18. F IL E (Use Excel) While the housing market has not recovered, real estate investment in college towns continues to promise good returns (The Wall Street Journal, September 24, 2010). With rents holding up, this is good news for investors but the same cannot be said for students. There also tends to be significant variability in rents. Consider monthly rents of two bedroom apartments in two campus towns: Ann Arbor, Michigan, and Davis, California. A portion of the data is shown in the accompanying table; the complete data, labeled Rentals, can be found on the text website.

Ann Arbor Rent Davis Rent

$850 $744 929 850

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1450 1810 Source: www.zillow.com.

a. Use Excel to calculate th e standard deviation o f rent fo r Ann Arbor, Michigan, and Davis, California.

b. Construct and in te rp re t 95% confidence intervals fo r the standard deviation o f rent fo r both Ann Arbor, Michigan, and Davis, California.

c. For each campus tow n , determ ine if th e standard deviation o f rent differs from $200; use α = 0.05.