Exhibit 15-8.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: .The following table shows a portion of the regression results. Refer to Exhibit 15-8.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 concludes that neither of the explanatory variables is significant in explaining Rent. B)Does not reject H₀,and concludes that neither of the explanatory variables 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 concludes that at least one of the explanatory variables,Bath and/or Sqft,is significant in explaining Rent.

Question

Quizplus · Accepted Answer

The null hypothesis of the joint significance test is that all the coefficients of the explanatory variables are zero, which means that neither of the variables (Bath and Sqft) has any significant impact on explaining the rent. The p-value of the test is 0.0039, which is less than the significance level of 0.05. Therefore, we reject the null hypothesis and conclude that at least one of the explanatory variables (Bath and/or Sqft) is significant in explaining Rent.