Question

You are given data on number of radio ads and sales for a local department store. You had observations for 20 months. The correlation between ads and sales is 0.40. Does this indicate a positive and significant relationship between ads and sales at the 5% level of significance

Answer 1

Answer:

"No" would be the appropriate response. A further explanation is provided below.

Step-by-step explanation:

According to the question,

Number of observations,

n = 20

Significance level,

d = 5%

i.e.,

= 0.05

Calculated correlation,

= 0.40

Critical correlation value will be:

=  0.444

• According to the question, we can see that the calculated correlation i.e., "0.40" is far less than the critical correlation value i.e., "0.444".
• The null hypothesis has always been not rejected. Thus it doesn't indicate the significant relationship.

So the above it the right response.