3. (15 Points) Fair market value of Hawaiian properties. Prior to 1980, private homeowners in Hawaii had to lease the land their homes were built on because the law (dating back to the islands' feudal period) required that land be owned only by the big estates. After 1980, however, a new law instituted condemnation proceedings so that citizens could buy their own land. To comply with the 1980 law, one large Hawaiian estate wanted to use regression analysis to estimate the fair market value of its land. Its first proposal was the quadratic model Ey =B,+ Bix+ B2x where y= Leased fee value (i.e., sale price of property) *=6 Size of property in square feet Data collected for 20 property sales in a particular neighborhood, given in the file HAWAII, were used to fit the model. a. (3 Points) The least squares prediction equation is y= x - L X b. (2 Points) Calculate the predicted values and corresponding residuals for the model. The residuals and fitted values are: Predicted value Residual ly yl 90.99 60.75 -8.05 139.15 -51.55 43.04 0.16 80.11 23.69 46.20 -1.10 116.49 -29.69 85.13 - 11.83 102.93 41.37 64.87 -3.57 109.74 38.26 66.92 18.08 149.29 21.91 97.04 0.46 126.96 31.14 38.12 - 13.92 40.94 6.06 63.84 -9.14 77.09 -9.09 -13.92