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Please help! Show steps, too. Interest rates and mortgages again. In Chapter 7, Exercise 32, we
saw a plot of total mortgages in the United States (in millions of 2006 dollars) versus tte interest
rate at various times over the past 26 years. The correlation is r = -0.84. The mean mortgage
amount is $151.9 million and the mean interest rate is 8.88%. The standard deviations are $23.86
million for mortgage amounts and 2.58% for the interest rates. Is a regression model appropriate
for predicting mortgage amount from interest rates? Explain. What is the equation that predicts
mortgage amount from interest rates? What would you predict the mortgage amount would be if
the interest rates climbed to 20%? Do you have any reservations about your prediction in part c?
If we standardized both variables, what would be the regression equation that predicts
standardized mortgage amount from standardized interest rates? If we standardized both
variables, what would be the regression equation that predicts standardized interest rates from
standardized mortgage amount?
Solution
?

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Please help! Show steps, too. Interest rates and mortgages again. In.pdf

  • 1. Please help! Show steps, too. Interest rates and mortgages again. In Chapter 7, Exercise 32, we saw a plot of total mortgages in the United States (in millions of 2006 dollars) versus tte interest rate at various times over the past 26 years. The correlation is r = -0.84. The mean mortgage amount is $151.9 million and the mean interest rate is 8.88%. The standard deviations are $23.86 million for mortgage amounts and 2.58% for the interest rates. Is a regression model appropriate for predicting mortgage amount from interest rates? Explain. What is the equation that predicts mortgage amount from interest rates? What would you predict the mortgage amount would be if the interest rates climbed to 20%? Do you have any reservations about your prediction in part c? If we standardized both variables, what would be the regression equation that predicts standardized mortgage amount from standardized interest rates? If we standardized both variables, what would be the regression equation that predicts standardized interest rates from standardized mortgage amount? Solution ?