# Question: Since 1980 average mortgage interest rates have fluctuated from a

Since 1980, average mortgage interest rates have fluctuated from a low of under 4% to a high of over 14%. Is there a relationship between the amount of money people borrow and the interest rate that’s offered? Here is a scatterplot of Total Mortgages in the United States (in millions of 2005 dollars) versus Interest Rate at various times over 26 years. The correlation is -0.84.

For these data Kendall’s tau is-0.61. Does that provide proof that if mortgage rates are lowered people will take out more mortgages? Explain what Kendall’s tau says and does not say.

For these data Kendall’s tau is-0.61. Does that provide proof that if mortgage rates are lowered people will take out more mortgages? Explain what Kendall’s tau says and does not say.

## Answer to relevant Questions

For which one of the following situations would a Wilcoxon rank-sum (or Mann-Whitney) test be appropriate? a) The Mohs scale rates the hardness of minerals. If one mineral can scratch another, it is judged to be harder. ...For which one of the following situations would Kend all's tau be appropriate? a) Comparing the ratings of a new product on a 5-point Likert scale by a panel of consumers to their ratings of a competitor's product on the ...An investment bank is thinking of investing in a start-up alternative energy company. They can become a major investor for $6M, a moderate investor for $3M, or a small investor for $1.5M. The worth of their investment in 12 ...For the payoff table in Exercise 13, find the action with the highest expected value. In exercise a) If forecasters think the probability of rising consumer confidence is 0.70, what is its expected value? b) What action ...Aaron’sAir (Exercises) estimates that high-demand periods (which depend on the weather and on bookings for conferences) occur with probability .3 and medium demand periods occur with probability .5. The rest are low-demand ...Post your question