Long term bond yields and the yield spread

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Reference no: EM131381432

A financial regression analysis was carried out to estimate the linear relationship between long-term bond yields and the yield spread, a problem of significance in finance. The sample sizes were 242 monthly observations in each of five countries, and the results were the obtained regression r² values for these countries. The results were as follows.

Canada	Germany	Japan	U.K.	U.S.
5.9%	13.3%	3.5%	31.7%	3.3%

Assuming that all five linear regressions were statistically significant, comment on and interpret the reported r² values.

Reference no: EM131381432

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