Question

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 bank's charges (measured in dollars per month) for services rendered to local companies. the company's sales revenue (measured in dollars per month) is used to predict service charges to the company. data for 21 companies who use the bank's services were used to fit the model:

yhat =2700+3000x

1. The independent (x) variable is

2. The dependent (y) variable is

3. An interpretation of value of 300 in the regression is

Answer 1

Solution:

1. The independent (x) variable is:

Answer: Company's sales revenue is the independent variable in the given regression model as it is used to predict the bank's service charges.

2. The dependent (y) variable is

Answer: Bank's service charge is the dependent variable in the given regression model.

3. An interpretation of value of 300 in the regression is

Answer: The value 300 is the slope of the given regression model and it is the estimated average increase in the bank's service charge for one dollar increase in the company's sales revenue.