A sample containing years to maturity and yield () for corporate bonds are contained in the…
A sample containing years to maturity and yield () for corporate
bonds are contained in the table below.
Company Ticker
Years
Yield
GE
1.00
0.767
MS
1.10
1.716
WFC
1.35
0.897
TOTAL
1.75
1.378
TOTAL
3.25
1.748
GS
3.75
3.558
MS
4.00
4.413
JPM
4.25
2.310
C
4.75
3.332
RABOBK
4.75
2.805
TOTAL
5.00
2.069
MS
5.00
4.739
AXP
5.00
2.181
MTNA
5.00
4.366
BAC
5.00
3.699
VOD
5.00
1.855
SHBASS
5.00
2.861
AIG
5.00
3.452
HCN
7.00
4.184
MS
9.25
5.798
GS
9.25
5.365
GE
9.50
3.778
GS
9.75
5.367
C
9.75
4.414
BAC
9.75
4.949
RABOBK
9.75
4.203
WFC
10.00
3.682
TOTAL
10.00
3.270
MTNA
10.00
6.046
LNC
10.00
4.163
FCX
10.00
4.030
NEM
10.00
3.866
PAA
10.25
3.856
HSBC
12.00
4.079
GS
25.50
6.913
C
25.75
8.204
GE
26.00
5.130
GE
26.75
5.138
T
28.50
4.930
BAC
29.75
5.903
a. Choose the correct scatter diagram of the
data usingyears to maturity as the independent
variable.
A
B
C
D
– Select your answer -ABCDItem 1
Does a simple linear regression model appear to be
appropriate?
– Select your answer -A simple linear regression model appears
to be appropriate.A simple linear regression model does not appear
to be appropriate.Item 2
b. Develop an estimated regression equation
withyears to maturity andas the independent
variables (to 4 decimals). Enter negative values as negative
numbers.
What is the value of the coefficient of determination?
Note: Reportbetween 0 and 1.
(to 3 decimals)
What is the value of thetest statistic?
(to 2 decimals)
What is the -value? If your answer is zero enter “0”.
(to 4 decimals)
c. As an alternative to fitting a second-order
model, fit a model using the natural logarithm of price as the
independent variable; that is, (to 3 decimals).
What is the value of the coefficient of determination?
Note: Reportbetween 0 and 1.
(to 3 decimals)
What is the value of thetest statistic?
(to 2 decimals)
What is the -value? If your answer is zero enter “0”.
(to 4 decimals)
Does estimated regression using natural logarithm
ofprovide a better fit than estimated regression
equation developed in part (b)? Explain.
– Select your answer -Yes, it doesNo, it does notItem 14
Because.
We were unable to transcribe this imageWe were unable to transcribe this imageWe were unable to transcribe this imageWe were unable to transcribe this image- Select your answer – Does a simple linear regression model appear to be appropriate? – Select your answer – b. Develop an estimated regression equation with = = years to maturity and as the independent variables (to 4 decimals). Enter negative values as negative numbers. Yield + Years + YearsSq What is the value of the coefficient of determination? Note: Report Rbetween 0 and 1. (to 3 decimals) What is the value of the F test statistic? (to 2 decimals) What is the p-value? If your answer is zero enter “0”. (to 4 decimals) c. As an alternative to fitting a second-order model, fit a model using the natural logarithm of price as the independent variable; that is, W = b + b In(z) (to 3 decimals). Yield In(Years) What is the value of the coefficient of determination? Note: Report R between 0 and 1. (to 3 decimals) What is the value of the F test statistic? (to 2 decimals) What is the p-value? If your answer is zero enter “O”. (to 4 decimals) Does estimated regression using natural logarithm of provide a better fit than estimated regression equation developed in part (b)? Explain – Select your answer. Because R-Sq=0.6731 R-Sq (adj) -0.6645. Check My Work (1 remaining) 0-Icon Key
