Question

In: Math

The chart below lists the sales in thousands of dollars based on the advertising budget for...

The chart below lists the sales in thousands of dollars based on the advertising budget for that quarter. The regression equation is Y' = 4.073 + 0.8351X. What is the correlation coefficient?

Advertising ($hunderds) Sales ($thousands)
0 5
3 5.5
4 7
5 7.8
6 9
7 11

Multiple Choice

  • 0.775

  • 0.844

  • 0.926

  • 1.00

Solutions

Expert Solution

Advertising ($hunderds) (x) Sales ($thousands)(y) (x- mean of x) (y - mean of y) (x- mean of x)^2 (y - mean of y)^2 (x- mean of x)(y - mean of y)
0 5                     -4.1667                     -2.5500                    17.3611                      6.5025                                             10.6250
3 5.5                     -1.1667                     -2.0500                      1.3611                      4.2025                                               2.3917
4 7                     -0.1667                     -0.5500                      0.0278                      0.3025                                               0.0917
5 7.8                      0.8333                      0.2500                      0.6944                      0.0625                                               0.2083
6 9                      1.8333                      1.4500                      3.3611                      2.1025                                               2.6583
7 11                      2.8333                      3.4500                      8.0278                    11.9025                                               9.7750
Total                    30.8333                    25.0750                                             25.7500

After calculation, Correlation coefficient is = 0.926

PLEASE LET ME KNOW IF YOU HAVE ANY DOUBTS. THANKS!!


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