Last week we looked at the interest rate for a 30-year conventional mortgage and the median number of months homes were listed for sale. We saw that 2008 was a peculiar year, so that data point has been dropped. Consider a model where the interest rate is used to predict the number of months a house will be on the market before being sold.
Year Interest, x Months, y
1991 9.49 7.3
1992 8.85 7.2
1993 7.47 6.1
1994 8.32 5.1
1995 8.32 4.8
1996 7.93 5.7
1997 8.14 4.6
1998 7.14 5.9
1999 6.92 4.6
2000 8.15 5
2001 7.08 5.3
2002 6.99 4.3
2003 5.81 4.7
2004 5.83 4.3
2005 5.86 4.4
2006 6.51 3.9
2007 6.18 5.8
a) Test the model to determine if the model is valid. Be sure to state you null and alternative hypotheses. What is your p-value? What is your conclusion? As a part of this assignment, submit a copy of your Excel file with this p-value clearly labeled.
b) Test the slope to determine if it is significant. Be sure to state you null and alternative hypotheses. What is your p-value? What is your conclusion? As a part of this assignment, submit a copy of your Excel file with this p-value clearly labeled.
c) What is the value of the Coefficient of Determination? As a part of this assignment, submit a copy of your Excel file with this value clearly labeled.
d) What is the value of the standard error of the estimate? As a part of this assignment, submit a copy of your Excel file with this value clearly labeled.