Use the data file JoblessRate.xlsx to answer this question. The economic downtur

Question

Use the data file JoblessRate.xlsx to answer this question. 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 data show the jobless rate and the delinquent loan percentage
for 27 major real estate markets. Use excel to answer the following questions.

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

metro area          jobless rate(%)                delinquent loans(%)

Atlanta 7.1 7.02 Boston 5.2 5.31 Charlotte 7.8 5.38 Chicago 7.8 5.40 Dallas 5.8 5.00 Denver 5.8 4.07 Detroit 9.3 6.53 Houston 5.7 5.57 Jacksonville 7.3 6.99 Las Vegas 7.6 11.12 Los Angeles 8.2 7.56 Miami 7.1 12.11 Minneapolis 6.3 4.39 Nashville 6.6 4.78 New York 6.2 5.78 Orange County 6.3 6.08 Orlando 7.0 10.05 Philadelphia 6.2 4.75 Phoenix 5.5 7.22 Portland 6.5 3.79 Raleigh 6.0 3.62 Sacramento 8.3 9.24 St. Louis 7.5 4.40 San Diego 7.1 6.91 San Francisco 6.8 5.57 Seattle 5.5 3.87 Tampa 7.5 8.42

Explanation / Answer

metro area jobless rate delinquent loan Atlanta 7.1 7.02 Boston 5.2 5.31 Charlotte 7.8 5.38 Chicago 7.8 5.4 Dallas 5.8 5 Denver 5.8 4.07 Detroit 9.3 6.53 Houston 5.7 5.57 Jacksonville 7.3 6.99 Las Vegas 7.6 11.12 Los Angeles 8.2 7.56 Miami 7.1 12.11 Minneapolis 6.3 4.39 Nashville 6.6 4.78 Formula used to calculate correlation coefficient = CORREL(C6:C32,D6:D32) New York 6.2 5.78 Orange County 6.3 6.08 Orlando 7 10.05 Philadelphia 6.2 4.75 Phoenix 5.5 7.22 Portland 6.5 3.79 Raleigh 6 3.62 Sacramento 8.3 9.24 St. Louis 7.5 4.4 San Diego 7.1 6.91 San Francisco 6.8 5.57 Seattle 5.5 3.87 Tampa 7.5 8.42 correlation coefficient = 0.441323931

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