Use the following information to solve problem 39 40 A rea

Use the following information to solve problem # 39 & 40

A real estate analyst believes that the three main factors that influence an apartment

39. When testing whether Bed is significant at the 5% level, she: a. Rejects H0: beta 1 = 0, and concludes that the number of bedrooms significantly influences rent. b. Does not reject H0: beta 1 = 0, and concludes that the number of bedrooms significantly influences rent. c. Rejects H0: beta 1 = 0, and concludes that the number of bedrooms does not significantly influence rent. d. Does not reject H0: beta 1 = 0, and concludes that the number of bedrooms does not significantly influence rent. 40. When testing whether Bath is significant at the 5% level, she: a. Rejects H0: beta 2 = 0, and concludes that the number of bathrooms significantly influences rent. b. Does not reject H0: beta 2 = 0, and concludes that the number of bathrooms significantly influences rent. C. Rejects H0: beta 2 = 0, and concludes that the number of bathrooms does not significantly influence rent. d. Does not reject H0: beta 2 = 0, and concludes that the number of bathrooms does not significantly influence rent.

Solution

39. (a) Rejects H_o: beta₁=0 and concludes that number of bedrooms significantly influences rent

For bed P_value=0.0010;Significance level=0.05

Since P_value<Significance Level, we reject the null hypothesis, i.e, number of bedrooms doesn\'t influence an apartment\'s rent.

40. d. Does not reject H₀:beta₂=0 and concludes that number of bathrooms doesn\'t significantly influence rent.

For Bath P value=0.1195; significance level=0.05

Since Pvalue>Significance Level, we fail to reject null hypothesis,i.e,number of bath doesn\'t influences apartment rent.