The National Association of Realtors has reported data on housing affordability for 1990-1999, and values for two of the variables are listed in file XR15093. Repre- senting affordability is y = average monthly mortgage payment as a percentage of median household income. Representing the cost of a mortgage is x = the average mortgage rate, as a percentage. Source: World Almanac and Book of Facts 2001, p. 743.
a. Determine the least-squares regression equation for y as a function of x, then estimate y if the average mortgage rate is x = 8.0%.
b. What percentage of the variation in affordability (y) is explained by the average mortgage rate (x)? At the 0.05 level, does the slope of the equation differ signi?- cantly from 0?
c. Given x = 8.0%, construct and interpret the 95% con?dence and prediction intervals associated with y.