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Homework Assignment 4

Homework Assignment 4 Carlos M. CarvalhoMcCombs School of BusinessProblem 1 Suppose we are modeling house price as depending on house size, the number of bedroomsin the house and the number of bathrooms in the house. Price is measured in thousands ofdollars and size is measured in thousands of square our model is:P= 20 + 50 size + 10 nbed + 15 nbath + , N(0,102).(a) Suppose you know that a house has size = , nbed = 3, and nbath = is the distribution of its price given the values for size, nbed, and nbath.(hint: it is normal with mean = ?? and variance = ??)20 + 50 + 10 3 + 15 2 = 160P= 160 + so thatP N(160,102)(b) Given the values for the explanatory variables from part (a), give the 95% predictiveinterval for the price of the 20(c) Suppose you know that a house has size = , nbed = 4, and nbath =3.

1.Based on the model assumptions, what is the expected value of R=Ggiven OBPfor teams in the AL? How about the NL? 2.Interpret 0, 1 and 2. 3.After running the regression and obtaining the results, can you conclude with 95% probability that the marginal e ect of OBP on R=G(after taking into account the League e ect) is positive? 4.Test the ...

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