Question

An insurance company is interested in determining whether life insurance coverage is influenced linearly by disposable income. A randomly chosen sample of size 20 produced the data shown in the table below. Construct a scatterplot with a trend line. What conclusions can you draw?

Disposable Income ($ thousands)	Life Insurance Coverage ($ thousands)
45	60
40	58
65	100
50	50
70	120
75	140
70	100
40	50
50	70
45	60
65	80
60	90
45	50
40	50
55	70
55	60
60	80
75	120
45	50
65	70

Answer 1

From the scatter plot and trend line, we can infer that the majority of life insurance coverage lie within the range of 50-90 ($ thousands). As the disposable income increases, there has been an increase in the life insurance coverage amount.