Question

# You are a new hire at Laurel Woods Real Estate, which specializes in selling foreclosed homes...

You are a new hire at Laurel Woods Real Estate, which specializes in selling foreclosed homes via public auction. Your boss has asked you to use the following data (mortgage balance, monthly payments, payments made before default, and final auction price) on a random sample of recent sales in order to estimate what the actual auction price will be. Add a new variable that describes the potential interaction between the loan amount and the number of payments made.

 Loan Monthly Payments Payments Made Auction Price \$ 85,615 \$ 1,026.96 1 \$ 19,475 113,393 990.66 34 33,975 111,466 751.28 9 45,675 100,925 855.98 8 16,600 97,600 860.23 16 40,700 104,400 983.27 19 63,100 113,800 1,075.54 21 72,600 116,400 1,087.16 35 72,300 100,000 900.01 33 58,100 92,800 683.11 36 37,100 105,200 915.24 34 52,600 105,900 905.67 38 51,900 94,700 810.70 25 43,200 105,600 891.33 20 52,600 104,100 864.38 7 42,700 85,700 1,074.73 30 22,200 113,600 871.61 24 77,000 119,400 1,021.23 58 69,000 90,600 836.46 3 35,600 104,500 1,056.37 22 63,000

A.

Determine the regression equation. (Round your answers to 3 decimal places. Negative amounts should be indicated by a minus sign.)

 Auction Price = + Loan + Monthly Payment + Payments Made + x1x3

Complete the following table. (Round your answers to 3 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign.)

 Predictor Coefficient SE Coefficient t p-value Constant Loan Monthly Payment Payments Made (Loan)(Payments Made)

Compute the t-value corresponding to the interaction term. (Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.)

T-Value=

A)Applying multiple regression from excel: data-data analysis: regression

Auction price

 Coefficients Standard Error t Stat P-value Intercept -129406.631 66969.663 -1.932 0.072 loan 1.496 0.566 2.643 0.018 monthly payment 21.147 29.323 0.721 0.482 Payments Made 1559.184 1988.459 0.784 0.445 x1x3 -0.013 0.019 -0.697 0.496

t-value corresponding to the interaction term =-0.70