Author:
Christine Farr

A property developer wished to investigate the factors influencing sale prices for inner city apartments inBrisbane. From data collected on 100 properties sold in the last month, the following relationship between saleprices in thousands of dollars, floor area in square metres and the number of bedrooms and bathrooms wasestimated:PRICE = 85 + 1.213*AREA + 6.145*BED + 10.321*BATHHolding all other variables constant, an additional bedroom will increase the predicted sale price of anapartment by how much? Give your answer in thousands of dollars correct to three decimal places.Question 2The Financial Review wished to estimate the amount of annual government spending using tax revenue andlevel of nationwide debt. Data from 1958-2008 (inclusive) was used. All variables were measured in billions ofdollars. It was found that the mean square error for the regression was 17 and the total sum of squares was 3000.Hence, what percentage of the variation in annual government spending is explained by the regressionequation? Give your answer correct to two decimal places.Question 31. A recent study by the World Bank wished to determine whether there was a relationship between theabundance of natural resources in a country and its long term rate of economic growth. Their study used40 (n) countries over a long period to 1995. Letting Y be the rate of growth measured as a percentageand X be a measure of natural resource abundance, the following relationship between the two variableswas estimated. Standard errors of bo and b1 are reported below the coefficients in parentheses.Y = 5.664 - 0.0059 X(1.285) (0.0029)To test the significance of the relationship, a 5% level of significance was adopted.1. State the direction of the alternative hypothesis used to test the statistical significance of therelationship. Type gt (greater than), ge (greater than or equal to), lt (less than), le (less than or equal to)or ne (not equal to) as appropriate in the box.Blank 12. Use the tables in the text to determine the critical value of the test statistic to three decimal places (inabsolute terms). Blank 23. Calculate the test statistic, reporting your answer to two decimal places.Blank 34. Is the null hypothesis rejected for this test? Type yes or no.Blank 45. Disregarding your answer in part 4, if the null hypothesis was rejected, would there appear to be alinear relationship between resource abundance and economic growth? Type yes or no.Blank 5Question 4A financial economist wished to determine whether the efficiency of financial institutions differed between thetype of institution. Nine banks, six merchant banks and five major finance companies were surveyed (the resultsare contained in the partially completed ANOVA table below).

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