Answer:
Step-by-step explanation:
Hello!
Given the variables
Y: Starting salary of a graduate at a top business school
X: GMAT score of the business school
The sample used had a size n=20
The estimated regression equation was ^Y= -92040 + 228Xi
The correlation coefficients were r= 0.81
You need to know if r is statistically significant at a 0.05 level:
Assuming the hypotheses are:
H₀: There is a linear correlation between the variables of interest
H₁: There is no linear correlation between the variables of interest
α: 0.05
This test is two-tailed.
The p-value for a r=0.81 and n=20 is 0.000015
Using the p-value approach, the decision rule is:
If p-value ≤ α, reject the null hypothesis
If p-value > α, do not reject the null hypothesis
In this case, the p-value is less than α, the decision is to reject the null hypothesis.
At a 5% level, you can conclude that the coefficient of correlation is statistically significant.
