econ216 - Version 2 Answer 4.25 Using the output data when...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Version 2 Answer 4.25 Using the output data, when S & P is 1100 DJIA is 10257.78. The coefficient of correlation value of 0.839512 suggests a strong positive relationship between the S & P and the DJIA markets. This is verified by the coefficient of S & P (b 1 ) illustrating that when the S & P market increases by $1 the DJIA increases by $6.53262885. Answer Data Set 2 THS represents total housing sales in the USA (monthly data) MR represents the mortgage rate ICS represents the index of consumer sentiment or confidence in the US. Simple regression analysis: Economic logic : In USA most houses are bought on mortgages, mortgage houses become less attractive when mortgage rate go up and total houses sales in USA decreases and vice versa. Housing sales and mortgage rate are negatively correlated according to the output. Coefficients : The total housing sales in the USA decreases by $12.21138 with every percentage increase in the mortgage rate. Looking at the intercept value, the total housing sales in the USA is $ 159.5925 when mortgage rates are 0%. Statistically Useful: The model is not very useful in predicting the total housing sales in the USA as the calculated coefficient of determination is 46.99%. The reset of the portion which
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern