The Bank of Canada is interested in studying the relationship between mortgage rates and median home prices. The data is provided below interest rate (%) Median home price S183,800 S183,200 S174,900 Year 10.30 10.30 10.10 1988 1989 1990 9.30 $173,500 $172,900 S173,200 S173,200 1991 1992 8.40 1993 7.30 8.40 7.90 1994 1995 $169,700 S174,500 S177,900 S188,100 1996 7.60 1997 7.60 1998 6.90 1999 7.40 $203,200 $230,200 $258,200 2000 8.10 2001 2002 2003 7.00 6.50 $309,800 $329,800 $431,000 5.80 5.80 5.80 2004 2005 $515,000 $537,000 $496,000 $352,000 2006 6.40 2007 6.30 6.00 2008 2009 5.00 $232,000 $291,700 $262,900 2010 4.70 2011 4.40 2012 3.60 $299,200 2013 4.00 $321,200 $373,500 $358,100 $382,500 $402,900 2014 4.10 2015 3.80 2016 3.60 2017 4.00 ) Estimate a simple linear regression model and find the value of the parameters for the estimation of mortgage rates and the median home price. ) Interpret the intercept and the slope coefficients ) State the correlation coefficient and the coefficient of determination. Interpret the coefficient of determination
The Bank of Canada is interested in studying the relationship between mortgage rates and median home prices. The data is provided below interest rate (%) Median home price S183,800 S183,200 S174,900 Year 10.30 10.30 10.10 1988 1989 1990 9.30 $173,500 $172,900 S173,200 S173,200 1991 1992 8.40 1993 7.30 8.40 7.90 1994 1995 $169,700 S174,500 S177,900 S188,100 1996 7.60 1997 7.60 1998 6.90 1999 7.40 $203,200 $230,200 $258,200 2000 8.10 2001 2002 2003 7.00 6.50 $309,800 $329,800 $431,000 5.80 5.80 5.80 2004 2005 $515,000 $537,000 $496,000 $352,000 2006 6.40 2007 6.30 6.00 2008 2009 5.00 $232,000 $291,700 $262,900 2010 4.70 2011 4.40 2012 3.60 $299,200 2013 4.00 $321,200 $373,500 $358,100 $382,500 $402,900 2014 4.10 2015 3.80 2016 3.60 2017 4.00 ) Estimate a simple linear regression model and find the value of the parameters for the estimation of mortgage rates and the median home price. ) Interpret the intercept and the slope coefficients ) State the correlation coefficient and the coefficient of determination. Interpret the coefficient of determination
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![The Bank of Canada is interested in studying the relationship between mortgage rates and median
home prices. The data is provided below
interest rate (%)
10.30
Year
Median home price
S183,800
$183,200
1988
1989
10.30
1990
10.10
$174,900
1991
9.30
S173,500
$172,900
$173,200
1992
8.40
1993
7.30
1994
8.40
$173,200
S169,700
S174,500
1995
7.90
1996
7.60
1997
7.60
$177,900
$188,100
S203,200
$230,200
$258,200
S309,800
1998
6.90
1999
7.40
2000
8.10
2001
7.00
2002
6.50
2003
5.80
$329,800
2004
5.80
$431,000
2005
2006
2007
$515,000
$537,000
$496,000
5.80
6.40
6.30
2008
6.00
$352,000
$232,000
$291,700
$262,900
2009
5.00
2010
4.70
2011
4.40
2012
2013
3.60
$299,200
4.00
$321,200
$373,500
$358,100
$382,500
$402,900
2014
4.10
2015
3.80
2016
3.60
2017
4.00
a) Estimate a simple linear regression model and find the value of the parameters for the
estimation of mortgage rates and the median home price.
b) Interpret the intercept and the slope coefficients
c) State the correlation coefficient and the coefficient of determination. Interpret the
coefficient of determination
d) Confirm the intercept, slope and correlation coefficient by computing them without SPSS
e) At the 5% significance level, determine if the model is useful. In responding, construct and
test any appropriate hypothesis.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3c1c5c28-2ca6-44ee-95f7-47547a3f37b3%2Ffc026e3b-8a82-446d-99e5-f25afbcd3a97%2F56k1shei_processed.png&w=3840&q=75)
Transcribed Image Text:The Bank of Canada is interested in studying the relationship between mortgage rates and median
home prices. The data is provided below
interest rate (%)
10.30
Year
Median home price
S183,800
$183,200
1988
1989
10.30
1990
10.10
$174,900
1991
9.30
S173,500
$172,900
$173,200
1992
8.40
1993
7.30
1994
8.40
$173,200
S169,700
S174,500
1995
7.90
1996
7.60
1997
7.60
$177,900
$188,100
S203,200
$230,200
$258,200
S309,800
1998
6.90
1999
7.40
2000
8.10
2001
7.00
2002
6.50
2003
5.80
$329,800
2004
5.80
$431,000
2005
2006
2007
$515,000
$537,000
$496,000
5.80
6.40
6.30
2008
6.00
$352,000
$232,000
$291,700
$262,900
2009
5.00
2010
4.70
2011
4.40
2012
2013
3.60
$299,200
4.00
$321,200
$373,500
$358,100
$382,500
$402,900
2014
4.10
2015
3.80
2016
3.60
2017
4.00
a) Estimate a simple linear regression model and find the value of the parameters for the
estimation of mortgage rates and the median home price.
b) Interpret the intercept and the slope coefficients
c) State the correlation coefficient and the coefficient of determination. Interpret the
coefficient of determination
d) Confirm the intercept, slope and correlation coefficient by computing them without SPSS
e) At the 5% significance level, determine if the model is useful. In responding, construct and
test any appropriate hypothesis.
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