Credit Scores (Refer to Problem 26, Section 4.1.) An economist wants to determine the relation between one's FICO score, x, and the interest rate of a 36-month auto loan, y. The given data represent the interest rate (in percent) a bank would offer on a 36-month auto loan for various FICO scores. Credit Score, x Interest Rate (percent), y 545 18.982 595 17.967 640 12.218 675 8.612 705 6.680 750 5.150

(a) Find the least-squares regression line treating the FICO score, x, as the explanatory variable and the interest rate, y, as the response variable. (b) Interpret the slope and y-intercept, if appropriate. Note: Credit scores have a range of 300 to 850. (c) Predict the interest rate a person would pay if her FICO score were the median score of 723. (d) Suppose Bob has a FICO score of 680 and he is offered an interest rate of 8.3%. Is this a good offer? Why?