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Steve Caples, a real estate appraiser in Lake Charles, Louisiana, has developed a regression model to help appraise residential housing in the Lake Charles area. The model was developed using recently sold homes in a particular neighborhood. The price (Y) of the house is based on the square footage (X) of the house. The model is
Y^=33,478+62.4X
The coefficient of correlation for the model is 0.63.
-Use the model to predict the selling price of a house that is 1,860 square feet.
-A house with 1,860 square feet recently sold for $165,000. Explain why this is not what the model predicted.
-If you were going to use multiple regression to develop an appraisal model, what other quantitative variables might be included in the model?
-What is the coefficient of determination for this model?
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