Homework Help is Here – Start Your Trial Now!
Math
Statistics
The different interest rates charged by some financial institutions may reflect how stringent their standards are for their loan appraisals: the lower the rate, the higher the standards, and hence, the lower the default rate. The data below were collected from a sample of eight financial companies selected at random. Financial company Interest rate (in %) x Default rate (in 1000 loans) y 12 3 45 7.0 50 7 6.6 6.0 8.5 8.0 7.5 6.5 7.0 56 58 48 45 49 46 47 al Find the least square regression line. b/ Perform the test Ho: Bi = 0, HA: BI + 0 (using a = 0.05) to determine whether there is enough evidence to infer that a linear dependence exists between interest rate (x) and default rate (y).

The different interest rates charged by some financial institutions may reflect how stringent their standards are for their loan appraisals: the lower the rate, the higher the standards, and hence, the lower the default rate. The data below were collected from a sample of eight financial companies selected at random. Financial company Interest rate (in %) x Default rate (in 1000 loans) y 12 3 45 7.0 50 7 6.6 6.0 8.5 8.0 7.5 6.5 7.0 56 58 48 45 49 46 47 al Find the least square regression line. b/ Perform the test Ho: Bi = 0, HA: BI + 0 (using a = 0.05) to determine whether there is enough evidence to infer that a linear dependence exists between interest rate (x) and default rate (y).

Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section: Chapter Questions
Problem 35T
See similar textbooks
icon
Related questions
Question
The different interest rates charged by some financial institutions may reflect how stringent their standards are for their loan appraisals: the lower the rate, the higher the standards, and hence, the lower the default rate. The data below were collected from a sample of eight financial companies selected at random. 3 4 5 6 6.0 8.5 8.0 7.5 6.5 45 7 8 7.0 47 |2 Financial company Interest rate (in %) x Default rate (in 1000 loans) y 1 7.0 6.6 48 50 56 58 49 46 al Find the least square regression line. b/ Perform the test Ho: Bi = 0, Ha: BI # 0 (using a = 0.05) to determine whether there is enough evidence to infer that a linear dependence exists between interest rate (x) and default rate (y).
Transcribed Image Text:The different interest rates charged by some financial institutions may reflect how stringent their standards are for their loan appraisals: the lower the rate, the higher the standards, and hence, the lower the default rate. The data below were collected from a sample of eight financial companies selected at random. 3 4 5 6 6.0 8.5 8.0 7.5 6.5 45 7 8 7.0 47 |2 Financial company Interest rate (in %) x Default rate (in 1000 loans) y 1 7.0 6.6 48 50 56 58 49 46 al Find the least square regression line. b/ Perform the test Ho: Bi = 0, Ha: BI # 0 (using a = 0.05) to determine whether there is enough evidence to infer that a linear dependence exists between interest rate (x) and default rate (y).
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
SEE MORE TEXTBOOKS