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?Credit Scores An economist wants to determine the relation between one’s FICO score, x, and the interest rate of a 36-month auto loan, y. The data rep

Statistics: Informed Decisions Using Data | 5th Edition | ISBN: 9780134133539 | Authors: Michael Sullivan III ISBN: 9780134133539 240

Solution for problem 12 Chapter 14.1

Statistics: Informed Decisions Using Data | 5th Edition

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Statistics: Informed Decisions Using Data | 5th Edition | ISBN: 9780134133539 | Authors: Michael Sullivan III

Statistics: Informed Decisions Using Data | 5th Edition

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Problem 12

Credit Scores An economist wants to determine the relation between one’s FICO score, x, and the interest rate of a 36-month auto loan, y. The data represent the interest rate (in percent) a bank might offer on a 36-month auto loan for various FICO scores.

Use the results from Problem 18 in Section 4.2 to answer the following questions:

(a) Treating credit score as the explanatory variable, x, determine the estimates of 0 and 1.

(b) Compute the standard error of the estimate, Se.

(c) Determine Sb1.

(d) A normal probability plot of the residuals indicates it is reasonable to conclude the residuals are normally distributed. Test whether a linear relation exists between credit score and interest rate at the  = 0.05 level of significance.

(e) Construct a 95% confidence interval about the slope of the true least-squares regression line.

Step-by-Step Solution:

Step 1 of 5) Credit Scores An economist wants to determine the relation between one’s FICO score, x, and the interest rate of a 36-month auto loan, y. The data represent the interest rate (in percent) a bank might offer on a 36-month auto loan for various FICO scores. Use the results from Problem 18 in Section 4.2 to answer the following questions: (a) Treating credit score as the explanatory variable, x, determine the estimates of 0 and 1. (b) Compute the standard error of the estimate, Se. (c) Determine Sb1. (d) A normal probability plot of the residuals indicates it is reasonable to conclude the residuals are normally distributed. Test whether a linear relation exists between credit score and interest rate at the = 0.05 level of significance. (e) Construct a 95% confidence interval about the slope of the true least-squares regression line.

Step 2 of 2

Chapter 14.1, Problem 12 is Solved
Textbook: Statistics: Informed Decisions Using Data
Edition: 5
Author: Michael Sullivan III
ISBN: 9780134133539

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?Credit Scores An economist wants to determine the relation between one’s FICO score, x, and the interest rate of a 36-month auto loan, y. The data rep