Make a scatter diagram and compute the correlation for the given data.
The following data are based on information on the information from Domestic Affairs. Let X is 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 35
|
75
|
|
Y
|
40 35
|
30 25
|
14
|
(A) Make a scatter diagram and draw the line you think best fits the data
(B) Would you say the correlation in low, moderate or strong? Positive or Negative
(C) Use a calculator to verify that x = 135, x 2nd = 7133, y =2nd =4674, and xy=3040. Compute r. As x increases, does the value of r imply that y should tend to increase or decease? Explain