In: Statistics and Probability
Find out if x and y are significantly related. Use a significance level of α = 0.01. Also calculate the sample correlation coefficient between the price and the number of flash drives sold. Show all work -
Price (x) | Units sold (y) |
34 | 4 |
36 | 4 |
32 | 6 |
35 | 5 |
31 | 9 |
38 | 2 |
39 | 1 |
correlation coefficient r= | Sxy/(√Sxx*Syy) =-44/sqrT(52*41.71) = | -0.945 |
degree of freedom =n-2=7-2 =5
test for significance:
null hypothesis: Ho: ρ | = | 0 | |
Alternate Hypothesis: Ha: ρ | ≠ | 0 | |
0.01 level,two tail test and n-2= 5 df, critical t= | 4.032 | ||
Decision rule: reject Ho if absolute value of test statistic |t|>4.032 |
test stat t= | r*(√(n-2)/(1-r2))=-0.945*sqrt((7-2)/(1-(-0.945)^2)) = | -6.444 |
since test statistic falls in rejection region we reject null hypothesis | ||||
we have sufficient evidence to conclude that there is a significant linear relationship between variables |