A real estate developer of single-family dwellings across the country is in the process of developing plans for the next several years. An analyst for the company believes that interest rates are likely to increase but remain at low levels. To help make decisions about the number of homes to build, the developer acquired the monthly bank prime rate and the number of new single-family homes sold monthly (thousands) from 1963 to 2012.
Calculate the coefficient of determination. Explain what this statistic tells you about the relationship between the prime bank rate and the number of single-family homes sold.