Using regression analysis, Fairfield Co. graphed the following relationship of its cheapest product line's sales with its customers' income levels:
If there is a strong statistical relationship between the sales and customers' income levels, which of the following numbers best represents the correlation coefficient for this relationship?
a.- 9.00
b.+9.00
c.- 0.93
d.+0.93
Answer:C
Choice "C" is correct. The correlation coefficient measures the strength of the relationship between variables. It is a number between -1 and +1. If the relationship is strong, it will have a coefficient near +1 or -1 depending on the slope of the relationship. In this case, the descending relationship has a negative slope. The correlation coefficient will be close to -1, or -0.93 as given.Choice "a" is incorrect. The correlation coefficient is a number between +1 and -1.
Choice "d" is incorrect. The relationship between sales and income levels is downward sloping, indicating a negative relationship, not a positive one.
Choice "b" is incorrect. The correlation coefficient is a number between +1 and -1.