Understanding Basic Statistics 6th Edition by Charles Henry Brase,Corrinne Pellillo Brase

Exercise 19

Health Insurance: Administrative Cost The following data are based on information from Domestic Affairs. Let x be the average number of employees in a group health insurance plan, and ley y be the average administrative cost as a percentage of claims.

(a) Make a scatter diagram and draw the line you think best fits the data.
(b) Would you say the correlation is low, moderate, or strong positive or negative
(c) Use a calculator to verify that x = 135, x 2 = 7133, y = 148, y 2 = 4674, and xy = 4674, and xy = 3040. Compute r. As x increase from 3 to 75, does the value of r imply that y should tend to increase or decrease Explain.