What does given model predict for interest rate in year 2000

Reference no: EM131401405

Interest rates:

Here's a plot showing the federal rate on 3-month Treasury bills from 1950 to 1980, and a regression model fit to the relationship between the Rate (in %) and Years since 1950. (www.gpoaccess.gov/eop/)

216_Graph 008.jpg

a) What is the correlation between Rate and Year?

b) Interpret the slope and intercept.

c) What does this model predict for the interest rate in the year 2000?

d) Would you expect this prediction to have been accurate? Explain.

Reference no: EM131401405

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