Question

The summary output of Paradise Retreats' model in Excel is in the tables below:

Regression Statistics
Multiple R	0.764437898
R Square	0.5843653
Adjusted R Square	0.555700838
Standard Error	315.8931794
Observations	60

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	413	317.1379944	0.110883586	0.912472524	-613.4546286	683.785425
x1	15	7.187801286	1.304664049	0.202266328	-5.323038326	24.07837018
x2	5	9.990263453	3.509123492	0.001488311	14.62468522	55.48945112

According to the tables, which of the following statements about this regression model are true?

Select all correct answers

A.The area of the apartment is not significant at a confidence level of 99%.

B.This regression model explains less than 50% of the variation of the price per night.

C.The area of the apartment is not significant at a confidence level of 95%.

D.The distance to the beach is not significant at a confidence level of 99%.

E.The area of the apartment is significant at a confidence level of 99%.

F.None of the above.

Answer 1

Here' the answer to the question. Please let me know in case you've not understood any part of it.

I'll assume x1 is Area of apartment and x2 is distance from beach.

A.The area of the apartment is not significant at a confidence level of 99%.
x1/Area is not significanct at a confidence level of 99%. This is because it has a p-value of .2023 which
is more than .01, hence x1/Area is not statistically significant
A is correct ( assuming x1 is area)

B.This regression model explains less than 50% of the variation of the price per night.
false, it has a R-square of 58%, which is more than 50%. Hence, model explains more than 50%
B is incorrect

C. Correct. Its p-value of .2023 is more than .05 (alpha here)

D. Incorrect. x2/Distance to the beach has a p-value of .001488, which's less than .01, hence statistically significant

E. Incorrect. The area of the apartment (x1) has a p-value of more than .01 (99% CI is .01 alpha). Hence, area of apt is insignifcant at confidence level of 99%