Question

If we standardized both variables, what would be the regression equation that predicts standardized mortgage amount from standardized interest rates?

Answer 1

Answer:

$b_{1}$ = r $\frac{Sy}{Sx}$ = -0.84

$b_{0} = y - b_{1} x$

The mortgage will be 220.88

The interest amount will be 7.768

Explanation:

Regression model is used to identify the relation between two variables. In the given question the regression model fits best to identify the mortgage amount from interest rates. The interest rate and mortgage both are quantitative values so the regression model is most suitable for this.