Question

Let x be the average number of employees in a group health insurance plan, and let y be the average administrative cost as a percentage of claims.

x	3	7	15	36	72
y	40	35	30	28	16

(a) Make a scatter diagram of the data and visualize the line you think best fits the data.

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Submission Data

(b) Would you say the correlation is low, moderate, or strong? positive or negative?

moderate and positivestrong and negative    moderate and negativelow and positivelow and negativestrong and positive

(c) Use a calculator to verify that Σx = 133, Σx² = 6763, Σy = 149, Σy² = 4765, and Σxy = 2975. Compute r. (Round your answer to three decimal places.)
r =

As x increases, does the value of r imply that y should tend to increase or decrease? Explain.

Given our value of r, y should tend to increase as x increases.Given our value of r, y should tend to remain constant as x increases.    Given our value of r, we cannot draw any conclusions for the behavior of y as x increases.Given our value of r, y should tend to decrease as x increases.

Answer 1

Part a)

Part b)

There is strong but negative correlation between variables

Part c)

	X	Y	X * Y	X2	Y2
	3	40	120	9	1600
	7	35	245	49	1225
	15	30	450	225	900
	36	28	1008	1296	784
	72	16	1152	5184	256
Total	133	149	2975	6763	4765

r = -0.966

Part d)

Given our value of r, y should tend to decrease as x increases.