Essentials of Business Analytics 1st Edition by Jeffrey Camm,James Cochran,Michael Fry,Jeffrey Ohlmann ,David Anderson

Exercise 24

The recent economic downturn resulted in the loss of jobs and an increase in delinquent loans for housing. In projecting where the real estate market was headed in the coming year, economists studied the relationship between the jobless rate and the percentage of delinquent loans. The expectation was that if the jobless rate continued to increase, there would also be an increase in the percentage of delinquent loans. The following data show the jobless rate and the delinquent loan percentage for 27 major real estate markets.
a. Compute the correlation coefficient. Is there a positive correlation between the jobless rate and the percentage of delinquent housing loans What is your interpretation
b. Show a scatter diagram of the relationship between the jobless rate and the percentage of delinquent housing loans.