DATAfile: CorporateBonds A statistical program is recommended. A sample containing years to maturity and yield (%) for 4

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Datafile Corporatebonds A Statistical Program Is Recommended A Sample Containing Years To Maturity And Yield For 4 1 (97.24 KiB) Viewed 77 times

DATAfile: CorporateBonds A statistical program is recommended. A sample containing years to maturity and yield (%) for 40 corporate bonds is contained in the data file named CorporateBonds.† (a) Develop a scatter diagram of the data using x = years to maturity as the independent variable. 10- 9 8 7 0 5 10 10 9 9 9 8 8 8 7 6 a tot a lot t 4 3 2 0 0 5 15 5 0 5 20 25 30 Years to Maturity 10 15 20 25 Years to Maturity 10 15 20 25 30 Years to Maturity Need Help? 35 10 Read It 35 O (b) Develop an estimated regression equation with x = years to maturity and x² as the independent variables. (Round your numerical values to two decimal places.) ŷ 1.017+.4606 -0.0103 ● 30 35 10 Does a simple linear regression model appear to be appropriate? O Since the data on the left and right sides of the plot both trend downward at about the same rate, a linear model is appropriate. Ⓒ Given the upward trend of the data on the left side of the plot, a linear regression model would predict higher values for the data on the right side of the plot. So, a curvilinear regression model appears to be more appropriate. O Given the downward trend of the data on the left side of the plot, a linear regression model would predict lower values for the data on the right side of the plot. So, a curvilinear regression model appears to be more appropriate. O Since the data on the left and right sides of the plot both trend upward at about the same rate, a linear model is appropriate. (c) As an alternative to fitting a second-order model, fit a model using the natural logarithm of years to maturity as the independent variable; that is, ý = bo + b₁ In(x). (Round your numerical values to two decimal places.) ŷ= .828 +1.56 Does the estimated regression using the natural logarithm of x provide a better fit than the estimated regression developed in part (b)? Explain. O The regression equation developed in part (c) provides a better fit since its R² value is higher and it predicts that yield will always increase with respect to years to maturity. O The regression equation developed in part (b) provides a better fit since its R² value is higher and it predicts that yield will begin to decrease after a certain point with respect to years to maturity. The regression equation developed in part (c) provides a better fit because it has less influential observations than the equation developed in part (b). O The regression equation developed in part (b) provides a better fit since it uses more independent variables than the equation developed in part (c). 10 15 20 25 Years to Maturity 30 35