Question: Table compares short-term bond funds, showing the average maturity (in years until the fund's bonds mature) and the rate of return as a percentage.
a. Find the correlation between maturity and return and interpret it.
b. Find the least-squares regression equation to predict return from maturity.
c. What rate of return would you expect for a fund with a current maturity of exactly one year?
d. Find the standard error of prediction (for predicting "return" at a given maturity level) and explain its meaning.
e. Is there a significant relationship between maturity and return? How do you know?
