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(a) Develop a scatter chart of the data using years to maturity as the independent variable. Does a simple linear regression model appear to be
(a) Develop a scatter chart of the data using years to maturity as the independent variable. Does a simple linear regression model appear to be appropriate? (b) Develop an estimated quadratic regression equation with years to maturity and squared values of of years to maturity as the independent variables. How much variation in the sample values of yield is explained by this regression model? Test the relationship between each of the independent variables and the dependent variable at a 0.05 level of significance. Company Ticker Years Yield GE 1 0.767 MS 1 1.816 WFC 1.25 0.797 TOTAL 1.75 1.378 TOTAL 3.25 1.748 GS 3.75 3.558 MS. 4 4.413 JPM 4.25 2.31 C 4.75 3.332 RABOBK 4.75 2.805 TOTAL. 5 2.069 MS 5 4.739 AXP 5 2.181 MTNA 5 4.366 BAC 5 3.699 VOD 5 1.855 SHBASS 5 2.861 AIG 5 3.452 HCN 7 4.184 MS 9.25 5.798 GS 9.25 5.365 GE 9.5 3.778 GS 9.75 5.367 C 9.75 4.414 BAC 9.75 4.949 RABOBK 9.75 4.203 WFC 10 3.682 TOTAL 10 3.27 MTNA 10 6.046 LNC 10 4.163 FCX 10 4.03 NEM 10 3.866 PAA 10.25 3.856 HSBC. 12 4.079 GS 25.5 6.913 C 25.75 8.204 GE 26 5.13 GE 26.75 5.138 T 28.5 4.93 BAC 29.75 5.903
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