Question: 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 let y be the average administrative cost as a percentage of claims.

1. Make a scatter diagram and draw the line you best thinks fits the data
2. Would you say the correlation is low, moderate or strong? Positive or negative?
3. Use a calculator to verify that ∑x=135, ∑x2=7133, ∑y=148, ∑y2=4674, ∑xy=3040. Compute r . As x increases does the value of r imply that y should tend to increase or decrease? Explain.

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