A consumer protection organization looks at relationships between individuals FICO Credit score and the interest rates they secure for 36 month auto loans. They randomly selected 6 individuals and observe their FICO Credit score and interest rate (APR) they were able to secure on their most recent 36 month auto loan from the loan application. The following scatterplot shows the relationship (with the regression line to fit):The regression line was calculated and is given by APR=61.369-0.076 (FICO Credit score) D) the consumer group considers using this regression to predict the APR on a 36 month auto loan of consumers with a credit score of 400 or below. Would this be a reasonable idea? E) Predict the interest rate for a person with a FICO Credit score of 660.
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.
A consumer protection organization looks at relationships between individuals FICO Credit score and the interest rates they secure for 36 month auto loans. They randomly selected 6 individuals and observe their FICO Credit score and interest rate (APR) they were able to secure on their most recent 36 month auto loan from the loan application. The following
D) the consumer group considers using this regression to predict the APR on a 36 month auto loan of consumers with a credit score of 400 or below. Would this be a reasonable idea?
E) Predict the interest rate for a person with a FICO Credit score of 660.
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