The following data on sale, size, and land-to-building ratio for 10 large industrial properties appeared in the paper “Using Multiple Regression Analysis in Real Estate Appraisal” (Appraisal Journal [2002]: 424-430): 

a) Calculate and interpret the value of the correlation coefficient between sale price and size. 

b) Calculate and interpret the value of the correlation coefficient between sale price and land-to-building ratio. 

c) If you wanted to predict sale price and you could use either size or land-to-building ratio as the basis for making predictions, which would you use? Explain. 

d) Based on your choice in Part (c), find the equation of the least-square regression line you would use for predicting y = sale price.

Size (thousands Land-to-Building of sq. ft.) Property Sale Price (millions of dollars) Ratio 1 10.6 2166 2.0 2.6 751 3.5 3 30.5 2422 3.6 4 1.8 224 4.7 20.0 3917 1.7 8.0 2866 2.3 7 10.0 1698 3.1 8 6.7 1046 4.8 5.8 1108 7.6 10 4.5 405 17.2