Question 11.52

11.52 Bank auto loans.

Banks charge different interest rates for different loans. A random sample of 2229 loans made by banks for the purchase of new automobiles was studied to identify variables that explain the interest rate charged. A multiple regression was run with interest rate as the response variable and 13 explanatory variables.13

  1. The statistic reported is 71.34. State the null and alternative hypotheses for this statistic. Give the degrees of freedom and the -value for this test. What do you conclude?
  2. The value of is 0.297. What percent of the variation in interest rates is explained by the 13 explanatory variables?