STA510 Business Statistics-The management of the agency

STA510 Business Statistics-The management of the agency

Subject: Mathematics    / Statistics
Question

School Business
Faculty of Law, Business & Education

Semester 2, 2016
1 of 3
STA510 Business Statistics

PART A:

Question 1 – Case Study

School Business
Faculty of Law, Business & Education

Semester 2, 2016
2 of 3
STA510 Business Statistics

The management of the agency are particularly interested in the rating of the street and
suggest that you develop a model to investigate the relationship between house prices and
rating of the street in which the house is located.
From a sample of 120 houses the above excel output was obtained. To help the management
of BCREA to make decisions, answer the following questions:
a) Determine the equation of the least squares regression line and explain the regression
equation.
[3 Marks]
b) What is the standard error of the estimate (Se)? Comment on the size of the standard error
for this regression model.
[3 Marks]
c) Test the slope of the regression line and what do you conclude about the slope?
[3 Marks]
d) What is the coefficient of determination for this model? Does street rating appear to be a
good predictor of house prices? Why or why not?
[3 Marks]
e) Finally, write a very brief report based on the information available for management.
[8 Marks]

PART B
Question 1
The city commission is considering raising property taxes to finance a new library. The
commission feels they should tax only those who own homes valued in the top 40 percent. If
property values can be expressed as X ~ N($62,500, $8,250), what is the highest value that
can be placed on a property without being subjected to the tax?
[5 Marks]

Question 2
The average life expectancy of males in a developing nation was believed to be 62.5 years.
However, the belief was based on data that might be considerably out of date. A random
survey of 250 deaths in that country revealed an average life span of 64.2 years with a
standard deviation of 8.8 years. Does the sample evidence indicate that the mean life
expectancy defers from 62.5 years? Use a significance level of 0.05.
[5 Marks]

*******

School Business
Faculty of Law, Business & Education

Semester 2, 2016
3 of 3
STA510 Business Statistics