The different interest rates charged by some financial institutions may reflect how stringent their standards are for their loan appraisals: the lower the rate, the higher the standards, and hence, the lower the default rate. The data below were collected from a sample of eight financial companies selected at random. Financial company Interest rate (in %) x Default rate (in 1000 loans) y 12 3 45 7.0 50 7 6.6 6.0 8.5 8.0 7.5 6.5 7.0 56 58 48 45 49 46 47 al Find the least square regression line. b/ Perform the test Ho: Bi = 0, HA: BI + 0 (using a = 0.05) to determine whether there is enough evidence to infer that a linear dependence exists between interest rate (x) and default rate (y).
The different interest rates charged by some financial institutions may reflect how stringent their standards are for their loan appraisals: the lower the rate, the higher the standards, and hence, the lower the default rate. The data below were collected from a sample of eight financial companies selected at random. Financial company Interest rate (in %) x Default rate (in 1000 loans) y 12 3 45 7.0 50 7 6.6 6.0 8.5 8.0 7.5 6.5 7.0 56 58 48 45 49 46 47 al Find the least square regression line. b/ Perform the test Ho: Bi = 0, HA: BI + 0 (using a = 0.05) to determine whether there is enough evidence to infer that a linear dependence exists between interest rate (x) and default rate (y).
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Question
![The different interest rates charged by some financial institutions may
reflect how stringent their standards are for their loan appraisals: the lower the rate, the
higher the standards, and hence, the lower the default rate. The data below were collected
from a sample of eight financial companies selected at random.
3 4 5 6
6.0 8.5 8.0 7.5 6.5
45
7 8
7.0
47
|2
Financial company
Interest rate (in %) x
Default rate (in 1000 loans) y
1
7.0
6.6
48
50
56
58
49
46
al Find the least square regression line.
b/ Perform the test Ho: Bi = 0, Ha: BI # 0 (using a = 0.05) to determine whether there is
enough evidence to infer that a linear dependence exists between interest rate (x) and
default rate (y).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F859ab7cd-6b07-4aeb-bf39-19b05ab877c1%2F15e635d0-b78d-4e93-ab0d-927ec8ec1814%2Fsrinozr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The different interest rates charged by some financial institutions may
reflect how stringent their standards are for their loan appraisals: the lower the rate, the
higher the standards, and hence, the lower the default rate. The data below were collected
from a sample of eight financial companies selected at random.
3 4 5 6
6.0 8.5 8.0 7.5 6.5
45
7 8
7.0
47
|2
Financial company
Interest rate (in %) x
Default rate (in 1000 loans) y
1
7.0
6.6
48
50
56
58
49
46
al Find the least square regression line.
b/ Perform the test Ho: Bi = 0, Ha: BI # 0 (using a = 0.05) to determine whether there is
enough evidence to infer that a linear dependence exists between interest rate (x) and
default rate (y).
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