Listed below are paired data consisting of amounts spent on advertising (in millions of dollars) and the profits (in millions of dollars). Determine if there is a significant positive linear correlation between advertising cost and profit . Use a significance level of 0.01 and round all values to 4 decimal places.
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.
![26
9
33
10
29
11
24
Ho: p = 0
На: р > 0
Find the Linear Correlation Coefficient
r =
Find the p-value
p-value =
The p-value is
OGreater than a
Less than (or equal to) a
The p-value leads to a decision to
Do Not Reject Ho
OReject Ho
OAccept Ho
The conclusion is
OThere is insufficient evidence to make a conclusion about the linear correlation between advertising
expense and profit.
OThere is a significant linear correlation between advertising expense and profit.
There is a significant negative linear correlation between advertising expense and profit.
OThere is a significant positive linear correlation between advertising expense and profit.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc961445a-5e57-4084-b25a-59122b804a0a%2F5239c07a-9bc0-4ee1-b136-62d68420d0ae%2Fd7mmr99_processed.png&w=3840&q=75)
![Listed below are paired data consisting of amounts spent on advertising (in millions of dollars) and the profits
(in millions of dollars). Determine if there is a significant positive linear correlation between advertising cost
and profit . Use a significance level of 0.01 and round all values to 4 decimal places.
Advertising Cost
Profit
3
13
4
24
5
16
23
7
25
8
26
9
33
10
29
11
24
Но: р
Ha: p>0
Find the Linear Correlation Coefficient
r =
Find the p-value
p-value =
The p-value is
Greater than a
OLess than (or equal to) a
The p-value leads to a decision to
Do Not Reject Ho](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc961445a-5e57-4084-b25a-59122b804a0a%2F5239c07a-9bc0-4ee1-b136-62d68420d0ae%2Fzbeg9a53_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Correlation:
The correlation value is obtained using EXCEL. The software procedure is given below:
- Enter the data.
- Select Data > Data Analysis >Correlation> OK.
- Enter Input Range as A1:B11.
- Mark Labels in First Row.
- Click OK.
The output using EXCEL is as follows:
From the output, the correlation coefficient is 0.7204.
Thus, the linear correlation coefficient is 0.7204.
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