HI6007 Statistics For Business Decisions - Tutorial Questions

Question 5 (7 marks)

Relax mortgage has gathered following data to examine the relationship between housing starts and mortgage interest rate.
Interest rate               3.5 3.0 2.8 3.6 2.75 3.4 3.12 2.86 3.02 2.6 3.3
Housing starts           100 120 150 130 170 135 130 185 127 190 96

You are required to;

i. Derive the regression equation (3 marks)
ii. Estimate the no of housing starts if mortgage interest rate is 2.5% (2 marks)
iii. Calculate and interpret the correlation between interest rate and no of housing starts.