Your answers should be submitted in the form of a Word document. The Word document should include ALL your answers including any charts, tables, or graphs required. Answer questions with complete sentences and using appropriate units and notation.You need to submit the Excel files that supports your work. If alpha is not provided, use 0.05 level of significance.

Problem 1 (15 points)

Consider Model 1 from Individual Assignment 2. Use this regression model to test (at the 5% level of significance) if the average price of a house in the West neighborhood is greater than the average price of a similar house in the North neighborhood.

Model 1:

A. State the null and alternative hypotheses.

B. State the p-value for this test.

C. State the statistical conclusion.

D. Communicate the results of the test in “plain English” within the context of the problem.

Problem 2 (15 points)

Consider Model 2 from Individual Assignment 2. Use this regression model to test (at the 5% level of significance) if the brick premium in the East is different from the brick premium in the North.

Model 2:

A. State the null and alternative hypotheses.

B. State the p-value for this test.

C. State the statistical conclusion.

D. Communicate the results of the test in “plain English” within the context of the problem.

Problem 3 (20 points)

Consider Model 2 from Individual Assignment 2. Use this regression model to test (at the 5% level of significance) if the average increase in price for a 1 square foot increase in floor area is less than $320 per square foot.

A. State the null and alternative hypotheses.

B. Calculate the p-value for this test. Include the Excel function (specifying all inputs) that you used to compute this probability.

C. State the statistical conclusion.

D. Communicate the results of the test in “plain English” within the context of the problem.