Rhonda Clark, a Slippery Rock, Pennsylvania, real estate developer, has devised a regression model to help determine residential housing prices in northwestern Pennsylvania. The model was developed using recent sales in a particular neighborhood. The price ( Y ) of the house is based on the size (square footage 5 X ) of the house. The model is:
a) 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.
b) An 1,860-square-foot house recently sold for $95,000. Explain why this is not what the model predicted.