Assignment

Subject: Quantitative Research Methods Due Date:

Instructor: M. Muzammil Ghayas Day:
Program: MBA Section Code: 1008
Name of Student: ISHRAT FATIMA Reg # 60106

Q.No. 1 Estimated Time To Complete Question (20 Minutes ) Max Marks

05

Below is the regression equation for the price of houses in Karachi.

Price = ɑo + β1 (Rooms) + β2 (Sq. ft) + ɛt

The second equation presents the values:

Price = 40,000,00 + 10,000,00 (Rooms) + 10,000 (Sq. meter) + ɛt

Under these circumstances, you have bought a home of 100 sq. meters and its price is Rs.
105,000,00. How many rooms will it have? Also calculate the value of ɛt for the equation.

SOLUTION:
Price = ɑo + β1 (Rooms) + β2 (Sq. ft) + ɛt

Price= 105,000,00
Sq= 100
Room= ?
Error = ?

Price = 40,000,00 + 10,000,00 (Rooms) + 10,000 (Sq. meter) + ɛt

1-Number of Room?
105,000,00=40,000,000+10,000,00 (R) +10,000(100)
105,000,00=40,000,000+10,00000+10,000,00 (R)
105,000,00=5000000 +10,000,00 (R)
105,000,00-5000000=10,000,00 (R)
5500000=10,000,00 (R)
R=5500000/10,000,00=5.5

Room=5

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2-Calculate Error Term ?

Price = ɑo + β1 (Rooms) + β2 (Sq. ft) + ɛt

Price = 40,000,00 + 10,000,00 (Rooms) + 10,000 (Sq. meter) + ɛt
105,000,00=40,000,000+10,000,00 (5) +10,000(100)+ ɛt
105,000,00-10000000= ɛt

ɛt=500000

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