The economic downturn in 2008-2009 resulted in the loss of jobs and an increase in delinquent loans

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The economic downturn in 2008-2009 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.

The economic downturn in 2008-2009 resulted in the loss of

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.

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Essentials of Business Analytics

ISBN: 978-1305627734

2nd edition

Authors: Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

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