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A Large National Bank Charges Local Companies for Using Their E(y)=β0+β1x.E ( y ) = \beta _ { 0 } + \beta _ { 1 } x .

Question 55

Multiple Choice

A large national bank charges local companies for using their services. A bank official reported the results of a regression analysis designed to predict the bank's charges (y) , measured in dollars per month, for services rendered to local companies. One independent variable used to predict service charge to a company is the company's sales revenue (x) , measured in $ million. Data for 21 companies who use the bank's services were used to fit the model E(y) =β0+β1x.E ( y ) = \beta _ { 0 } + \beta _ { 1 } x . Suppose a 95% confidence interval for ?1 is (15, 25) . Interpret the interval.


A) We are 95% confident that service charge (y) will increase between $15 and $25 for every $1 million increase in sales revenue (x) .
B) We are 95% confident that the mean service charge will fall between $15 and $25 per month.
C) We are 95% confident that sales revenue (x) will increase between $15 and $25 million for every $1 increase in service charge (y) .
D) We are 95% confident that service charge (y) will decrease between $15 and $25 for every $1 million increase in sales revenue (x) .

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