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In a study of the influence of financial institutions on bond interest rates in a certain country, quarterly data over a period of 12
In a study of the influence of financial institutions on bond interest rates in a certain country, quarterly data over a period of 12 years were analyzed. The postulated model was yi Bo+B1x11 +221 +, where y, is the change over the quarter in the bond interest rates, x, is the change over the quarter in bond purchases by financial institutions, and X2; is the change the quarter in bond sales by financial institutions. The estimated regression coefficients are b =0.057 and b = -0.061. Interpret these estimates. What is the correct interpretation of the coefficient estimates? Select the correct choice below and, if necessary, fill in the answer boxes within your choice. OA. Each additional bond purchased by financial institutions leads to a change in the estimated bond interest rates by change in the estimated bond interest rates by percent. percent. Each additional bond sale by financial institutions leads to OB. Each percent increase in the bond interest rates leads to a change in the estimated amount of bonds purchased by financial institutions by institutions by OC. There is no meaningful interpretation of the regression coefficients for this application. and a decrease in bond sales by financial
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