While the Federal Reserve controls short-term interest rates, long-term interest rates essentially depend on supply/demand dynamics, as well as longer-term interest rate expectations. In order to examine the relationship between short-term and long-term interest rates, monthly data were collected on the 3-month Treasury yield (in %) and the 10-year Treasury yield (in %). A portion of the data is shown in the accompanying table.

Month	Year	Three_month	Ten_year
Jan	2016	0.26	2.09
Feb	2016	0.31	1.78
Dec	2017	1.32	2.40

Click here for the Excel Data File

a.Estimate and interpret a sample regression equation using the 10-year yield as the response variable and the 3-month yield as the predictor variable.(Round your answers to 2 decimal places.)

b.Specify the coefficient of determination.(Round answers to 4 decimal places.) c-1.At the 5% significance level, determine whether the 3-month yield is significant in explaining the 10-year yield. First, specify the competing hypotheses. multiple choice 1

• H₀:₁= 0;H_A:₁> 0
• H₀:₁= 0;H_A:₁< 0
• H₀:₁= 0;H_A:₁ 0

c-2.Find thep-value. multiple choice 2

• p-value < 0.01
• 0.01 p-value < 0.025
• 0.025 p-value < 0.05
• 0.05 p-value < 0.10
• p-value 0.10

c-3.At the 5% significance level, is the 3-month yield significant in explaining the 10-year yield?? multiple choice 3

• Yes, since thep-value is less than 0.05.
• No, since thep-value is more than 0.05.
• No, since thep-value is less than 0.05.
• Yes, since thep-value is more than 0.05.

d-1.A study finds that a change in the 3-month yield implies the same change in the 10-year yield. This means that the slope coefficient attached to the 3-month yield is one. An economist believes that the study's finding is wrong. Specify the competing hypotheses to test the economist's claim. multiple choice 4

• H₀:₁= 1;H_A:₁> 1
• H₀:₁= 1;H_A:₁< 1
• H₀:₁= 1;H_A:₁ 1

d-2.Calculate the value of the test statistic.(Round your answer to 4 decimal places.)