Suppose a savings and loan association wants to forecast the delinquency rate on

Question

Suppose a savings and loan association wants to forecast the delinquency rate on home mortgages. Using monthly data, the following trend is estimated.

A. Does this estimate indicate a significant upward trend in the delinquency rate on home mortgages? In the space below, perform the appropriate t-test at the 5 percent significance level.

B.Perform an F-test to determine if the model is statiscally significant at the 5 percent level of significance.

C. Calculate the predicted delinquency rates for January 2014 and March 2014

DRJan 2014= ? percent

DR Mar 2014= ? percent

Dependent Variable DRT R-SQUARE F-RATIO P-VALUE ON F OBSERVATIONS 48 0.7982 181.93 .0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 2.60 0.74 3.51 0.0010 T 0.030 0.010 3.00 0.0043

Explanation / Answer

Suppose a savings and loan association wants to forecast the delinquency rate on

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