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.

x	3	7	15	34	71
y	40	35	30	27	17

1. Use a calculator to verify that x = 130, x² = 6480, y = 149, y² = 4743, and xy = 2940. Compute r. (Round your answer to four decimal places.)

2. As x increases, does the value of r imply that y should tend to increase or decrease? Explain.

a) Given our value of r, y should tend to decrease as x increases.

b) Given our value of r, we cannot draw any conclusions for the behavior of y as x increases.

c) Given our value of r, y should tend to remain constant as x increases.

d) Given our value of r, y should tend to increase as x increases.