Interest rates. Heres a plot showing the federal rate on 3-month Treasury bills from 1950 to 1980,
Question:
Interest rates. Here’s a plot showing the federal rate on 3-month Treasury bills from 1950 to 1980, and a regression model fit to the relationship between the Rate (in %)
and Years since 1950. (www.gpoaccess.gov/eop/)
a) What is the correlation between Rate and Year?
b) Interpret the slope and intercept.
c) What does this model predict for the interest rate in the year 2000?
d) Compute the Durbin-Watson statistic and comment.
e) Would you expect this prediction to have been accurate?
Explain.
Step by Step Answer:
Related Book For
Business Statistics
ISBN: 9780321716095
2nd Edition
Authors: Norean D. Sharpe, Paul F. Velleman, David Bock, Norean Radke Sharpe
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