Assume that there is a positive linear correlation between the variable R (return rate in percent of a financial investment) and the variable t (age in years of the investment) given by the regression equation R = 2.3t + 4.8. Without further information, can we assume there is a cause-and-effect relationship between the return rate and the age of the investment?   If the investment continues to grow at a constant rate, what is the expected return rate when the investment is 7 years old?   If the investment continues to grow at a constant rate, how old is the investment when the return rate is 30%?

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
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Chapter1: Starting With Matlab
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Assume that there is a positive linear correlation between the variable R (return rate in percent of a financial investment) and the variable t (age in years of the investment) given by the regression equation R = 2.3t + 4.8.

  • Without further information, can we assume there is a cause-and-effect relationship between the return rate and the age of the investment?

 

  • If the investment continues to grow at a constant rate, what is the expected return rate when the investment is 7 years old?

 

  • If the investment continues to grow at a constant rate, how old is the investment when the return rate is 30%?
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