A Bank Records the Number of Mortgage Applications and Its

question 55

Multiple Choice

A bank records the number of mortgage applications and its own prevailing interest rate (at the first of the month) for each of 16 consecutive months. Is there a correlation between the interest rate (x) and the number of applicants (y) , and if so, is it significant at the 5% or the 1% significance level? ​ ​ ​

• A) -0.652, significant at 5%
• B) -0.652, no significant correlation
• C) -0.733, significant at 1%
• D) -0.587, significant at 5%
• E) -0.587, significant at 1%

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Definitions:

Measure Of

A general term for a quantitative indicator used to assess or evaluate a specific attribute or property.

Geometric Mean

The central tendency of a set of numbers that is calculated by taking the nth root (where n is the count of numbers) of the product of the values.

Weighted Mean

The mean obtained by assigning each observation a weight that reflects its importance.

Arithmetic Mean

The sum of a set of numerical values divided by the number of values, commonly referred to as the average.