Final answer:
The correct statistical test for analyzing the relationship between forecasted and actual interest rate movements is Regression analysis, which is suitable for exploring a predictive relationship between two continuous variables.
Step-by-step explanation:
The correct answer is option D, Regression analysis. Regression analysis is a statistical tool for investigating the relationship between variables. In the context of forecasted and actual interest rate movements, a regression analysis would allow us to understand how well the forecasted values predict the actual interest rates and quantify the strength of that relationship.
It includes calculating the correlation coefficient and the line of best fit, which would demonstrate how changes in one variable (forecasted interest rates) predict changes in another (actual interest rates). Although ANOVA could compare means across more than two groups, and a T-test could compare means between two groups, neither is as suitable for exploring a predictive relationship between two continuous variables as regression analysis. The Chi-square test is not appropriate here as it tests for independence or goodness-of-fit and is often used for categorical data.
Regression analysis is the appropriate statistical test for analyzing the relationship between forecasted and actual interest rate movements. It helps in determining the strength and direction of the relationship between two variables. In this case, the forecasted interest rate movements (x) and the actual interest rate movements (y) can be analyzed using regression analysis.
Regression analysis calculates the regression equation (e.g., y = mx + c) and provides information about the slope (m) and intercept (c) of the line that best fits the data points. It also measures the goodness of fit, such as the coefficient of determination (R-squared), which indicates the proportion of the variance in the dependent variable (actual interest rate movements) that can be explained by the independent variable (forecasted interest rate movements).