In a study done in Wisconsin, it was found that the correlation coefficient betw
ID: 3258943 • Letter: I
Question
In a study done in Wisconsin, it was found that the correlation coefficient between the number of new homes built and the number of diamond rings purchased is - .01. Which of the following statements best describe the relationship between new homes built and number of diamond rings purchased?
Building new homes causes less diamond rings to be purchased. A new home is expensive, and new home buyers probably can't afford additional luxury items like diamond rings.
There is a very weak assocation between new homes built and number of diamond rings purchased. In fact, they are probably indendent of each other since the correlation coefficient is almost 0.
Purchasing a diamond ring causes less homes to be built.
There is a strong association between new home sales and diamond ring purchases, but we can't be certain of the exact nature of the relationship.
a-Building new homes causes less diamond rings to be purchased. A new home is expensive, and new home buyers probably can't afford additional luxury items like diamond rings.
b-There is a very weak assocation between new homes built and number of diamond rings purchased. In fact, they are probably indendent of each other since the correlation coefficient is almost 0.
c-Purchasing a diamond ring causes less homes to be built.
d-There is a strong association between new home sales and diamond ring purchases, but we can't be certain of the exact nature of the relationship.
Explanation / Answer
It was found that the correlation coefficient between the number of new homes built and the number of diamond rings purchased is - .01
So, Option b is correct .
There is a very weak assocation between new homes built and number of diamond rings purchased. In fact, they are probably indendent of each other since the correlation coefficient is almost 0.
Size of correlation Interpretation. 0.9 to 1 ( -0.9 to -1 ) Very high positive( negative ) correlation 0.7 to 0.9 ( -0.7 to -0.9 ) High positive( negative ) correlation 0.5 to 0.7 ( -0.5 to -0.7 ) Moderate positive( negative ) correlation 0.3 to 0.5 ( -0.3 to -0.5 ) Low positive( negative ) correlation 0.0 to 0.3 ( -0.0 to -0.3 ) negligible correlation.