Relationship between total mortgages and interest rate

Reference no: EM131394641

Since 1980, average mortgage interest rates have fluctuated from a low of under 6% to a high of over 14%. Is there a relationship between the amount of money people borrow and the interest rate that's offered? Here is a scatterplot of Total Mortgages in the United States (in millions of 2005 dollars) versus Interest Rate at various times over the past 26 years. The correlation is -0.84.

788_Graph 09.jpg

a) Describe the relationship between Total Mortgages and Interest Rate.

b) If we standardized both variables, what would the correlation coefficient between the standardized variables be?

c) If we were to measure Total Mortgages in thousands of dollars instead of millions of dollars, how would the correlation coefficient change?

d) Suppose in another year, interest rates were 11% and mortgages totaled $250 million. How would including that year with these data affect the correlation coefficient?

e) Do these data provide proof that if mortgage rates are lowered, people will take out more mortgages? Explain.

Reference no: EM131394641

Questions Cloud

Explain top two leadership points you would want to share : Explain how the strengths you have chosen for your partner would complement your strengths. Identify the top two leadership points you would want to share at the workshop, and discuss why you selected those points.

How was the need for the project identified : describe a project you have managed personally or professionally. Examples may include a trip you planned, a new product or service developed for your employer, a staff reorganization, and so on.

Describe the external events : Describe the external events (such as clicks, double-clicks, right-clicks, and mouseovers) to which each control responds.

Evaluate the internal and external environments : Analyze the competitive advantage of your selected company - Evaluate the strategies your selected company uses to create value and gain competitive advantage.

Relationship between total mortgages and interest rate : Describe the relationship between Total Mortgages and Interest Rate.- If we standardized both variables, what would the correlation coefficient between the standardized variables be?

Describe the overall goal of a supply chain : Describe the overall goal of a supply chain. Describe the difference between a supply that is responsive (service) and a supply chain that is efficient. Can a supply chain be both?

List the levels of responsibilities assessed by auditors : Learn which agencies audit health care facilities. Describe how HIM department should handle receipt of subpoenas. List the levels of responsibilities assessed by auditors. List the types of appeals available to health care facilities.

Housing cost index and the median family income by state : Describe the relationship between the Housing Cost Index and the Median Family Income by state.- If we standardized both variables, what would the correlation coefficient between the standardized variables be?

An internship in china xian city hotel : Develop and refine as you progress through your academic career in the School of l-lospitality Management. Use the resume template provided on Angel as your starting point, and refer to the example resumes to guide your efforts.

User Account

All Pages