Question

In: Statistics and Probability

A real estate agent is trying to learn about the pricing of a condominium complex. She...

A real estate agent is trying to learn about the pricing of a condominium complex. She collects the size (in square feet) and price (in $thousands) for 7 rooms in the complex, as shown below:

RoomNumber 408 401 324 232 231 115 101 SquareFootage 575 600 625 650 675 675 700 Price 185 190 200 205 210 220 225

(a) The real estate agent would like to use Square Footage to predict Price. Make a scatterplot of the Square Footage and Price data.
(b) If it is meaningful, calculate the correlation between Room Number and Price. If it is not meaningful, state why.
(c) If it is meaningful, calculate the correlation between Square Footage and Price. If it is not meaningful, state why.

(e) The least-squares regression line is the line that minimizes what?

(g) Two new units in this condo complex have square footages of 636 and 950. Calculate the predicted prices for each of these new units.

(h) For the two predicted prices in (g), which is more reliable? Why?

Expert Solution

(a)

(b)

It is not meaningful to calculate the correlation between Room Number and Price as Price of a room does not depend on the room number. Also room number is a categorical variable with no order.

(c)

Correlation between Square Footage and Price = 0.975

(e)

The least-squares regression line is the line that minimizes Sum of square of errors.

(g)

Predicted price for square footage of 636 = - 0.1471 + 0.3191*636 = 202.801

Predicted price for square footage of 950= - 0.1471 + 0.3191*950= 303

(h)

Price predicted for square footage of 636 will be more reliable as square footage of 950 seems to be an outlier

orchestra answered 1 year ago

A real-estate agent claims that the average price of a condominium in Naples, Florida is different...

A real-estate agent claims that the average price of a condominium in Naples, Florida is different from $50000. A sample of 81 condominiums has an average selling price of $51500 with a sample standard deviation of $8500. 13. The standardized test statistic calculated for a hypothesis test which tests whether the sample mean is equal to the hypothesized population mean is equal to: a, 1.56 b. 1.57 c. 1.59 14. The probability value of the event that the standardized test...

A real estate agent has 12 properties that she shows. She feels that there is a...

A real estate agent has 12 properties that she shows. She feels that there is a 40% chance of selling any one property during a week. The chance of selling any one property is independent of selling another property. Compute the probability of selling at least 5 properties in one week. Round your answer to four decimal places.

Which of the following is true about real estate pricing? Real estate prices are always the...

Which of the following is true about real estate pricing? Real estate prices are always the same as the value of the real estate. Real estate prices are a function of the value of the real estate. Real estate prices are clearly observable in the market. Real estate prices can be influenced by the number of buyers and sellers active in the market. What type of easement is usually used for commercial purposes? Appurtenant easement Negative easement Gross Easement. Dominant...

Binomial Distribution: A real estate agent has ten properties that she shows. She feels that there...

Binomial Distribution: A real estate agent has ten properties that she shows. She feels that there is a 10% chance of selling any one property during a week. The chance of selling any one property is independent of selling another property. Compute the expected number of properties to be sold in a week. Compute the standard deviation of the number of properties sold each week. Compute the probability of selling five properties in one week. Compute the probability of selling...

Jamie is a real estate agent working for ‘Houses R Us’ real estate. As part of...

Jamie is a real estate agent working for ‘Houses R Us’ real estate. As part of his employment contract, Jamie receives a base salary of $50,000 per annum plus 10% of the agency’s commission on sold properties where he has had a direct connection with the sale. He is also provided with a car, a Toyota Kluger costing $48,000. He is not required to contribute to the running costs of the car which total $13,500 per year and is allowed to...

Question 2 Jamie is a real estate agent working for ‘Houses R Us’ real estate. As...

Question 2 Jamie is a real estate agent working for ‘Houses R Us’ real estate. As part of his employment contract, Jamie receives a base salary of $50,000 per annum plus 10% of the agency’s commission on sold properties where he has had a direct connection with the sale. He is also provided with a car, a Toyota Kluger costing $48,000. He is not required to contribute to the running costs of the car which total $13,500 per year and...

Scheerer, a licensed real estate agent, and Fisher, a manager of commercial real estate, worked together...

Scheerer, a licensed real estate agent, and Fisher, a manager of commercial real estate, worked together on past real estate deals and knew each other from their business relationship. Scheerer gave Fisher a tip that some commercial real estate was on the market that Fisher might be interested in purchasing. Fisher made an offer to buy the properties and, with this offer, orally contracted for a 2 percent commission for Scheerer from the seller and another 2 percent commission from...

Art Neuner, an investor in real estate, bought an office condominium. The market value of the...

Art Neuner, an investor in real estate, bought an office condominium. The market value of the condo was $250,000 with a 70% assessment rate. Art feels that his return should be 12% per month on his investment after all expenses. The tax rate is $31.50 per $1,000. Art estimates it will cost $275 per month to cover general repairs, insurance, and so on. He pays a $140 condo fee per month. All utilities and heat are the responsibility of the...

John Trident was a real estate agent working for Quantum Real Estate Ltd. His sister-in-law Jennie...

John Trident was a real estate agent working for Quantum Real Estate Ltd. His sister-in-law Jennie was looking for some income property, and after some searching John Trident entered into a deal with Mr. and Mrs. Lipton, persuading them to list their property for sale with him and subsequently presented an offer to purchase from his sister-in-law, who used her maiden name (P. Hayes) so that the sellers would not know that he was related to the purchaser. Before the...

An agent for a residential real estate company in a suburblocated outside a major city...

An agent for a residential real estate company in a suburb located outside a major city has the business objective of developing more accurate estimates of the monthly rental cost for apartments. Toward the goal, the agent would like to use the size of an apartment, as defined by square footage to predict the monthly rental cost. The agent selects a sample of 8 one-bedroom apartments and the data are shown. Complete parts (a) through (f).\(\begin{array}{lllllllll}\text { Monthly Rent (\$)...