1. The Hyptest.xls file contains 3 sheets:

1. 2-tail sigma known
2. 1-tail sigma known
3. sigma unknown

Note that all the above deals with testing for population mean. Design a file for testing for population proportion, using the above as a model.

1. An agent for a residential real estate company in a large city would like to be able to predict the monthly rental cost for apartments, based on the size of the apartments, as defined by square footage. A sample of 25 apartments (stored in the table below) in a particular residential neighborhood was selected, and the information gathered revealed the following.

Why would it not be appropriate to use the model to predict the monthly rent for apartment that have 500 square feet.

Apartment Monthly Rent ($) Size (square feet)

3) Please discuss whether you would like SSR to be large relative to SST or would you rather have SSE large. What value does ("r" squared) have to be in order for this model to be good?

4 ) In the Excel file, Betting.xls , that you have downloaded, I have computed the t statistic for the hypothesis test for = 0 in cell E18 and the critical value in F18. Check this number against the number provided by Excel on the regression results sheet. They should agree.

1. On the basis of these calculations would you reject the null hypothesis?
2. State what the slope of the regression line in the terms of this problem. That is, if there is an increase on one unit in the x variable, what is the increase in the predicted y variable?

Having gone through question 1 and 2, how can you justify that this regression model is indeed appropriate when the slope is almost 0.

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Solution: The downloadable solution consists of 4 pages, 449 words and 1 charts.
Deliverable: Word Document