You did not receive full credit for this question in a previous attemp On its we

Question

You did not receive full credit for this question in a previous attemp On its webstite, the Statesman Journal newspaper (Salem, Oregon, 2005) reports mortgage loan interest rates for 30-year and 15-year fixed-rate mortgage loans for a number of Willamette Valley lending institutions. Of interest is whether there is any systematic difference between 30-year rates and 15-year rates (expressed as annual percentage rate or APR) and if there is, what is that difference. The following table displays the 30-year rate and the 15-year rate for each of nine lending institutions. Also given is the difference between the 30-year rate and the 15-year rate for each lending institution. Use the table to compare the 30-year rates and the 15-year rates. Also, calculate the average of the differences between the rates. (input the amount as positive value. Round your answer to 4 decimal places.) the size of 30-Year 15-Year Difference -3.153 Lending Institution Blue Ribbon Home Mortgage 2.503 5 656 Coast To Coast Mortgage 5600 5.195 Lending Community Mortgage Services Inc 4.895 4.562 3.5726.175 5.738 2.603 1.880 395 636 Jim Morrison's MBI Professional Valley Mortgage 5.300 4905 Mortgage First Professional Mortgage Corporation Resident Lending Group Inc.4.231 4.745 3.858 4.681 5.427 5.256 5.317 514

Explanation / Answer

Average for 30 year rate =4.6607

Average for 15year rate =5.0743

Overall the 30year rates are less than the 15 year rates

Variability in 30year rate lager than 15 year rates

Average of the differences=10.09/9

=1.1211(difference takes positive values)

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