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To complete this assignment successfully, you should:
§ Correlation Analysis§
Assignment
Send to your instructor a single
Excel file (including written answers) as e-mail an attachment through WebMail. addressed
toBA501@mail.cba.nau.edu and put "BA501
(last name) Assignment name and number" somewhere in
the e-mail "subject." If you have any questions on this home work, please
e-mail me with questions.
Put the different exercise outputs on separate sheets in the Excel file.
Here is the Excel
worksheet for this assignment. Use "save as"
to save it to your computer or to a floppy.
Exercise 1 Suppose the quantity sold of a good (Y) is measured against price (X) of the good sold during various weeks. Eight weeks were randomly selected over a one year of time frame. The following statistics were gathered:
Given:
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x |
y |
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4.00 |
9 |
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3.50 |
15 |
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3.00 |
19 |
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2.50 |
27 |
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2.00 |
31 |
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1.50 |
33 |
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1.00 |
39 |
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0.50 |
41 |
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Sx = 18 |
Sy =
214
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Sxy
= 384
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Sx2
= 51
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Sy2
= 6648
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n = 8 |
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A. Calculate the correlation coefficient using Excel and using the sums given above. What is the interpretation of r?
B. Do an hypothesis test for a negative correlation between
the price and the quantity sold using Excel. Assume
a 5% level of significance. State the hypotheses and describe how
you reach your conclusion. 
(click)
Exercise 2 Suppose the quantity produced of a good (Y) is measured against price (X) of the good during various weeks. Eight weeks were randomly selected over a one year of time frame. The following statistics were gathered:
Given:
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x |
y |
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4.00 |
40 |
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3.50 |
38 |
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3.00 |
32 |
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2.50 |
29 |
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2.00 |
24 |
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1.50 |
18 |
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1.00 |
16 |
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0.50 |
10 |
SCPxy = 91.75
SSx = 10.5
SSy = 808.875
A. Calculate the correlation coefficient using Excel and using the sums of squares given above. What is the interpretation of r?
B. Do an hypothesis test for a positive correlation between the price and the quantity sold using Excel. Assume a 5% level of significance. State the hypotheses and describe how you reach your conclusion.