200 38. 150 100 6. 8. 10 12 Interest Rate (%) Mortgage Loan Amount ($000)
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
gage interest rates have fluctuated from a low of under
the amount of money people borrow and the interest rate
that’s offered? Here is a
sus Interest Rate at various times over the past 26 years.
Amount and Interest Rate.
lation coefficient between the standardized variables be?
dreds of dollars instead of thousands of dollars, how
ing that year with these data affect the correlation
e) Do these data provide proof that if mortgage rates are
lowered, people will take out larger mortgages? Explain.
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