The facilities management department at a university wants to analyze the expenditure (in $thousands) on the university facilities with the increasing number of students for the past 10 years. This is to ensure that all university facilities and lands support the academic, research and administrative utilities of the university.

The data were collected from the past 10 years’

financial report, and a correlation coefficient of 0.95 between the expenditure (in $thousands) and the number of students was obtained.

a. Interpret the correlation coefficient value to indicate the strength and direction between the two variables.

b. Determine whether there is a significant linear relationship between the expenditure (in

$thousands) on the university facilities and the number of students at a 5% significance level.