A study of the following financial institutions showed their assets in million and pretax profit. AT the .05 significance level, can we conclude that there is positive correlation in the population? Follow the correlation coefficient 101 example and complete steps 1-7. STEP 1 Specify the population parameter of interest. STEP 2 Formulate the appropriate null and alternative hypotheses. STEP 3 Specify the level of significance STEP 4 Compute the correlation (r) coefficient and the (t) test statistics. You can use excel to compute the correlation. The following sample data were obtained. Assets in million 20 40 20 30 10 10 Pretax Profit 30 60 40 60 30 40 Compute the t-test statistic. What is the degrees of freedom (df)? What is the results of t-test statistic ________________ STEP 5 Construct the rejection region and decision rule. STEP 6 Reach a decision. (Reject or Do Not Reject) STEP 7 Draw a conclusion.
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
A study of the following financial institutions showed their assets in million and pretax profit. AT the .05 significance level, can we conclude that there is
Follow the
STEP 1 Specify the population parameter of interest.
STEP 2 Formulate the appropriate null and alternative hypotheses.
STEP 3 Specify the level of significance
STEP 4 Compute the correlation (r) coefficient and the (t) test statistics. You can use excel to compute the correlation.
The following sample data were obtained.
|
Assets in million |
20 |
40 |
20 |
30 |
10 |
10 |
|
Pretax Profit |
30 |
60 |
40 |
60 |
30 |
40 |
Compute the t-test statistic.
What is the degrees of freedom (df)? What is the results of t-test statistic ________________
STEP 5 Construct the rejection region and decision rule.
STEP 6 Reach a decision. (Reject or Do Not Reject)
STEP 7 Draw a conclusion.
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