An economist wants to determine the relation between one’s FICO score and interest rate of a...

An economist wants to determine the relation between one’s FICO score and interest rate of a 36-month auto loan. The data represent the interest rate (in percent) a bank might offer on a 36-month auto loan for various FICO scores. Credit Score, x: 550;600;640;670;700;750 Interest Rate, y: 19;18;12;8;6;5 a) Calculate the least regression line y=b0+b1x b) Calculate a 99% Confidence Interval about the slope of the least regression line c) Calculate a 99% Prediction Interval about the slope of the least regression line when x=650

Solutions

Expert Solution

The statistical software output for this problem is:

Hence,

a) Least square line:

y = 64.353 - 0.081 x

b) 99% confidence interval for slope:

(-0.1365, -0.0262)

c) 99% prediction interval:

(1.9526, 20.9853)

orchestra answered 1 year ago

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