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A real estate appraiser has developed a regression model to help appraise residential housing. The model was developed using recently sold homes in a particular neighborhood. The price (Y) of the house is based on the square footage of (X) of the home. The model is Y^ = 13473 + 37.65X
The correlation coefficient for the model is r = 0.63
a. Use the model to predict the selling price of a house that is 1860 square foot.
b. A house with 1860 square feet recently sold for $95000. Explain why this is not necessarily what the model predicted.
c. If you were going to use multiple regression to develop an appraisal model, what other quantitative variable might be included in the model?
d. What is the coefficient of determination for this model? Interpret its value.
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