A Large National Bank Charges Local Companies for Using Its

Multiple Choice

A large national bank charges local companies for using its services. A bank official reported the results of a regression analysis designed to predict the bank's charges (y) , measured in dollars per month, for services rendered to local companies. One independent variable used to predict service charge to a company is the company's sales revenue (x) , measured in millions of dollars. Data for 21 companies who use the bank's services were used to fit the model, The results of the simple linear regression are provided below. = 2,700 + 20x, s = 65, 2-tailed p-value = 0.064 (for testing ) Interpret the estimate of , the y-intercept of the line.

A) All companies will be charged at least $2,700 by the bank.
B) About 95% of the observed service charges fall within $2,700 of the least squares line.
C) There is no practical interpretation since a sales revenue of $0 is a nonsensical value.
D) For every $1 million increase in sales revenue, we expect a service charge to increase $2,700.