In recent years US. banks have been merging to form mega banks that span many states.The table on page 486, extracted from the Journal of Banking and Finance (Feb.

1999) lists the number of U.S. bank mergers each year from 1980 (year 1) to 1993 (year 14) for which $50 million or more changed hands in the transaction.

a. Construct a scattergram for the data, where y = number of mergers and x = year. Is there visual evidence of a linear relationship between x and y? Explain.

b. Use the method of least squares to fit a straight line to the data.

c. Graph the least squares line on your scattergram.

d. According to the least squares line, how many mergers will occur in 1994 (year 15)?
Compare your answer to the actual number of 1994 mergers: 42.