Question

The answer 2. what is the correlation between the interest rate and the yield of the stock 3. if the prime interest rate is 5% the price is predicted to be is?

Answer 1

Answer:

y = 2.11926272 + 0.39484459x

correlation = 0.65293153

price = 4.09348567

Explanation:

The equation of the regression line has that form:

y = a + bx, where a and b are the values given by the calculator.

So, replacing the values of a and b, we get:

y = 2.11926272 + 0.39484459x

On the other hand, the correlation is the value of r given by the calculator, so the correlation is 0.65293153

Finally, we can predict the price, replacing x with a certain percentage rate. Then, replacing x by 5%, we get:

y = 2.11926272 + 0.39484459x

y = 2.11926272 + 0.39484459(5)

y = 2.11926272 + 1.97422295

y = 4.09348567

So, the price predicted is 4.09348567.

Therefore, the answers are:

y = 2.11926272 + 0.39484459x

correlation = 0.65293153

price = 4.09348567