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A statistical program is recommended. Occasionally, it has been the case that home prices and mortgage rates dropped so low that in a number of cities the monthly cost of owning a home was less expensive than renting. The following data show the average asking rent for 10 markets and the monthly mortgage on the median priced home (including taxes and insurance) for 10 cities where the average monthly mortgage payment was less than the average asking rent. City Rent ($) Mortgage ($) A 840 539 B 1,062 1,002 C 823 626 D 779 71 3 E 796 655 F 1,071 979 G 953 776 H 851 695 I 762 651 J 723 654 (a) Develop the estimated regression equation that can be used to predict the monthly mortgage given the average asking rent. (Round your numerical values to three decimal places.) f: (b) Construct a residual plot against the independent variable. 200 200 200 I 100 100 m V! a ' - a u o ' 'd 0 '5'} . o '5! i) I! a: . O I: 100 100 200 200 700 800 900 1000 1100 700 800 900 1000 800 900 1000 1 100 0 Rent ($) 0 Rent (3) Rent ($) 200 m 100 o e . g o o a 0 - a . - 1 00 o 200 700 BOO 900 1 000 1 100 0 Rent (S) (D (c) Do the assumptions about the error term and model form seem reasonable in light of the residual plot? 0 The plot suggests curvature in the residuals indicating that the assumption of a linear relationship between the average asking rent and the monthly mortgage is questionable. O The plot suggests a generally horizontal band of residual points indicating that the error term and model form assumptions appear reasonable. 0 The plot suggests curvature in the residuals indicating that the assumption of a linear relationship between the average asking rent and the monthly mortgage appears reasonable. 0 The plot suggests a generally horizontal band of residual points indicating that the error term and model form assumptions are questionable. O The plot suggests a funnel pattern in the residuals indicating that the error term assumptions are questionable