A real estate analyst believes that the three main factors that influence an apartment's rent in a college town are the number of bedrooms, the number of bathrooms, and the apartment's square footage. For 40 apartments, she collects data on the rent (y, in $), the number of bedrooms (x₁), the number of bathrooms (x₂), and its square footage (x₃). She estimates the following model: Rent = β₀ + β₁Bedroom + β₂Bath + β₃Sqft + ε. The following table shows a portion of the regression results. When testing whether the explanatory variables Bath and Sqft are jointly significant, the p-value associated with the test is 0.0039. At the 5% significance level, she ________. A) rejects H₀, and cannot conclude that at least one of the explanatory variables, Bath and/or Sqft, is significant in explaining Rent B) does not reject H₀, and concludes that at least one of the explanatory variables, Bath and/or Sqft, is significant in explaining Rent C) rejects H₀, and concludes that at least one of the explanatory variables, Bath and/or Sqft, is significant in explaining Rent D) does not reject H₀, and cannot conclude that at least one of the explanatory variables, Bath and/or Sqft, is significant in explaining Rent

Question

Quizplus · Accepted Answer

Since the p-value associated with the test is less than 0.05, we reject the null hypothesis and can conclude that at least one of the explanatory variables, Bath and/or Sqft, is significant in explaining Rent. Therefore, the correct choice is C.

A Real Estate Analyst Believes That the Three Main Factors