The following table presents interest rates, in percent, for 30-year and 15-year fixed-rate mortgages, for January through December, 2012.

a. Compute the least-squares regression line for predicting the 15-year rate from the 30-year rate.

b. Construct a scatterplot of the 15-year rate (y) versus the 30-year rate (x). Graph the least-squares regression line on the same axes.

c. Is it possible to interpret the y-intercept? Explain.

d. If the 30-year rate differs by 0.3 percent from one month to the next, by how much would you predict the 15-year rate to differ?

e. Predict the 15-year rate for a month when the 30-year rate is 3.5 percent.

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30-Year 15-Year 30-Year 15-Year 3.92 3.20 3.55 2.85 3.89 3.16 3.60 2.86 3.95 3.20 3.47 2.78 3.91 3.14 3.38 2.69 3.80 3.03 3.35 2.66 3.68 2.95 3.35 2.66