Question

Using the following 5 year data series, calculate the correlation between interest rates and US new...

Using the following 5 year data series, calculate the correlation between interest rates and US new home sales.

Year Home sales (thousands) Interest rate (%)
1 605 9
2 554 9
3 524 4
4 605 4
5 508 10

the correct answer is :

0.196

Hint: Use the definition of correlation to calculate the result. Some useful intermediate values would be the means of the two variables, their covariance, and their standard deviations.

Double check your results with spreadsheet functions COVARIANCE.S, VAR.S, CORREL. please show the work on excel. Thank you.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Correlation is a measure used to find out the strength of relationship between any two variables.

Here, the 2 variables are home sales (X) and interest rates (Y)

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider the following time series data (Insert the data in an Excel file): Quarter Year 1...
Consider the following time series data (Insert the data in an Excel file): Quarter Year 1 Year 2 Year 3 1 8 9 12 2 5 6 9 3 7 8 10 4 8 11 11 2.1. Construct a time series plot. What type of pattern exists in the data? 2.2. Use a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Qtr1=1 if quarter 1, 0 otherwise; Qtr2=1...
Applications I Consider the following data representing the total time (in hours) a student spent on...
Applications I Consider the following data representing the total time (in hours) a student spent on reviewing for the Stat final exam and the actual score on the final. The sample of 10 students was taken from a class and the following answers were reported. time score 0 23 4 30 5 32 7 50 8 45 10 55 12 60 15 70 18 80 20 100 Part 1: Use the formulas provided on the 3rd formula sheet to compute...
using excel sheet to calculate 1. Firm A's sales last year = $280,000, net income =...
using excel sheet to calculate 1. Firm A's sales last year = $280,000, net income = $23,000.  What was its profit margin? (8.21%) 2. Firm A’s total assets = $415,000 and its net income = $32,750.  What was its return on total assets (ROA)?(7.89%) 3. Firm A’s total common equity = $405,000 and its net income = $70,000.  What was its ROE? (17.28%) 4. Firm A’s stock price at the end of last year = $23.50 and its earnings per share for the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT