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A Large National Bank Charges Local Companies for Using Their E(y)=β0+β1xE ( y ) = \beta _ { 0 } + \beta _ { 1 } x

Question 56

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 bankʹs 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 companyʹs sales revenue (x) , measured in $ million. Data for 21
Companies who use the bankʹs services were used to fit the model E(y) =β0+β1xE ( y ) = \beta _ { 0 } + \beta _ { 1 } x
Suppose a 95%95 \% confidence interval for β1\beta _ { 1 } is (15,25) ( 15,25 ) . Interpret the interval.


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

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