School Business Faculty of Law, Business & Education Semester 2, 2016 1 of 3 STA510 Business Statistics PART A: Question 1 - Case Study School Business Faculty of Law, Business & Education Semester 2, 2016 2 of 3 STA510 Business Statistics The management of the agency are particularly interested in the rating of the street and suggest that you develop a model to investigate the relationship between house prices and rating of the street in which the house is located. From a sample of 120 houses the above excel output was obtained. To help the management of BCREA to make decisions, answer the following questions: a) Determine the equation of the least squares regression line and explain the regression equation. [3 Marks] b) What is the standard error of the estimate (Se)? Comment on the size of the standard error for this regression model. [3 Marks] c) Test the slope of the regression line and what do you conclude about the slope? [3 Marks] d) What is the coefficient of determination for this model? Does street rating appear to be a good predictor of house prices? Why or why not? [3 Marks] e) Finally, write a very brief report based on the information available for management. [8 Marks] PART B Question 1 The city commission is considering raising property taxes to finance a new library. The commission feels they should tax only those who own homes valued in the top 40 percent. If property values can be expressed as X ~ N($62,500, $8,250), what is the highest value that can be placed on a property without being subjected to the tax? [5 Marks] Question 2 The average life expectancy of males in a developing nation was believed to be 62.5 years. However, the belief was based on data that might be considerably out of date. A random survey of 250 deaths in that country revealed an average life span of 64.2 years with a standard deviation of 8.8 years. Does the sample evidence indicate that the mean life expectancy defers from 62.5 years? Use a significance level of 0.05. [5 Marks] ******* School Business Faculty of Law, Business & Education Semester 2, 2016 3 of 3 STA510 Business Statistics