Over the past 30 years, the sample standard deviations of the rates of return for stock X and Stock Y were 0.20 and 0.12, respectively. The sample covariance between the returns of X and Y is 0.0096. When testing whether the correlation coefficient differs from zero, the value of the test statistic is t28 = 2.31. At the 5% significance level, the critical value is t0.025,28 = 2.048. The conclusion to the hypothesis test is A. to reject H0; we can conclude that the correlation coefficient differs from zero B. to reject H0; we cannot conclude that the correlation coefficient differs from zero C. do not reject H0; we can conclude that the correlation coefficient differs from zero D. do not reject H0; we cannot conclude that the correlation coefficient differs from zero
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.
Over the past 30 years, the sample standard deviations of the rates of return for stock X and Stock Y were 0.20 and 0.12, respectively. The sample
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A. to reject H0; we can conclude that the correlation coefficient differs from zero
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B. to reject H0; we cannot conclude that the correlation coefficient differs from zero
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C. do not reject H0; we can conclude that the correlation coefficient differs from zero
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D. do not reject H0; we cannot conclude that the correlation coefficient differs from zero
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