Question: 5. A sample containing years to maturity and yield (%) for 40 corporate bonds is contained in the data file named CorporateBonds (Barron's, April 2,

5. A sample containing years to maturity and yield (%) for 40 corporate bonds is contained in the data file named CorporateBonds (Barron's, April 2, 2012) available on the portal. (13 marks total) a. Use Excel@ or XLSTAT@ to develop a scatter diagram of the data, using x = years to maturity as the independent variable. Does a simple linear regression model appear to be appropriate? (3 marks) b. Develop an estimated regression equation, with x = years to maturity and x2 as the independent variables. (4 marks) c. As an alternative, fit a model using the natural logarithm of years to maturity as the independent variable; that is, > = by + b, In(x). Does the estimated regression using the natural logarithm of x provide a better fit than the estimated regression developed in part (b)? Explain. (6 marks)
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