Concept explainers
At the beginning of 2009, the economic downturn resulted in the loss of jobs and an increase in delinquent loans for housing. The national unemployment rate was 6.5% and the percentage of delinquent loans was 6.12% (The Wall Street Journal, January 27, 2009). 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 data below show the jobless rate and the delinquent loan percentage for 27 major real estate markets.
- a. Compute the
correlation coefficient . Is there apositive 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 jobless rate and the percentage of delinquent housing loans.
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Chapter 3 Solutions
Statistics for Business & Economics, Revised (MindTap Course List)
- Analysts have determined that an upcoming business deal, which costs the company $40000 to initiate, has a 10% chance of generating $300000 of revenue, and a 60% chance of generating $80000 of revenue. Otherwise, the program will generate no revenue at all. On average, how much money will this type of business deal make or lose for the company?arrow_forward1. Explain, why doesn’t an estimated absolute covariance number tell the investor much about the relationship between the returns on the two assets?arrow_forwardTraders from the faraway nation of Chplandia have brought infected goods to market in the capital of Pcoria. As a result, a new infectious disease called chpitis is spreading through the Pcorian population. Chpitis is not fatal, but leaves victims severely disfigured for the remainder of their lives. Throughout this problem, assume no discounting of future years.a. The Pcorian government surveys victims to determine how burdensome chpitis is. Respondents claim they are indifferent between living six years without chpitis and living ten years covered with chpitis scars. Most respondents explain that they face a major social stigma in Pcoria’s schools and workplaces.What is the implied quality weight q for a year lived in the aftermath of a chpitis infection?b. Now assume that a drug company has developed an ointment that can be used to treat chpitis sores and reduce scarring. Surveys indicate that the ointment, which costs $10,000 for a full course of treatment, can improve quality of…arrow_forward
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- Holt Mcdougal Larson Pre-algebra: Student Edition...AlgebraISBN:9780547587776Author:HOLT MCDOUGALPublisher:HOLT MCDOUGAL