A statistical program is recommended. Occasionally, it has been the case that home prices and mortgage rates dropped so low that in a number of cities the monthly cost of owning a home was less expensive than renting. The following data show the average asking rent for 10 markets and the monthly mortgage on the median priced home (including taxes and insurance) for 10 cities where the average monthly mortgage payment was less than the average asking rent. City Rent ($) Mortgage ($) A 840 539 B 1,062 1,002 C 823 628 D 779 713 E 796 655 F 1,071 975 G 953 776 H 851 695 I 762 651 J 723 654 Develop the estimated regression equation that can be used to predict the monthly mortgage given the average asking rent. (Round your numerical values to three decimal places.) ŷ = c.) Do the assumptions about the error term and model form seem reasonable in light of the residual plot? The plot suggests curvature in the residuals indicating that the assumption of a linear relationship between the average asking rent and the monthly mortgage appears reasonable. The plot suggests curvature in the residuals indicating that the assumption of a linear relationship between the average asking rent and the monthly mortgage is questionable. The plot suggests a generally horizontal band of residual points indicating that the error term and model form assumptions appear reasonable. The plot suggests a generally horizontal band of residual points indicating that the error term and model form assumptions are questionable. The plot suggests a funnel pattern in the residuals indicating that the error term assumptions are questionable.

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018

18th Edition

ISBN:9780079039897

Author:Carter

Publisher:Carter

Chapter10: Statistics

Section10.2: Representing Data

Problem 22PFA

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A statistical program is recommended. Occasionally, it has been the case that home prices and mortgage rates dropped so low that in a number of cities the monthly cost of owning a home was less expensive than renting. The following data show the average asking rent for 10 markets and the monthly mortgage on the median priced home (including taxes and insurance) for 10 cities where the average monthly mortgage payment was less than the average asking rent. City Rent ($) Mortgage ($) A 840 539 B 1,062 1,002 C 823 628 D 779 713 E 796 655 F 1,071 975 G 953 776 H 851 695 I 762 651 J 723 654 Develop the estimated regression equation that can be used to predict the monthly mortgage given the average asking rent. (Round your numerical values to three decimal places.) ŷ = c.) Do the assumptions about the error term and model form seem reasonable in light of the residual plot? The plot suggests curvature in the residuals indicating that the assumption of a linear relationship between the average asking rent and the monthly mortgage appears reasonable. The plot suggests curvature in the residuals indicating that the assumption of a linear relationship between the average asking rent and the monthly mortgage is questionable. The plot suggests a generally horizontal band of residual points indicating that the error term and model form assumptions appear reasonable. The plot suggests a generally horizontal band of residual points indicating that the error term and model form assumptions are questionable. The plot suggests a funnel pattern in the residuals indicating that the error term assumptions are questionable.

Definition Definition Middle value of a data set. The median divides a data set into two halves, and it also called the 50th percentile. The median is much less affected by outliers and skewed data than the mean. If the number of elements in a dataset is odd, then the middlemost element of the data arranged in ascending or descending order is the median. If the number of elements in the dataset is even, the average of the two central elements of the arranged data is the median of the set. For example, if a dataset has five items—12, 13, 21, 27, 31—the median is the third item in ascending order, or 21. If a dataset has six items—12, 13, 21, 27, 31, 33—the median is the average of the third (21) and fourth (27) items. It is calculated as follows: (21 + 27) / 2 = 24.

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