A realtor studies the relationship between the size of a house (in square feet)
ID: 3265692 • Letter: A
Question
A realtor studies the relationship between the size of a house (in square feet) and the property taxes owed by the owner. He collects the following data on six homes in an affluent suburb 60 miles outside of New York City. Use Table 2.
a. Calculate sxy and rxy. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. Calculate the value of the test statistic.
Calculate the value of the test statistic. (Round your intermediate calculations to 4 decimal places and final answer to 2 decimal places.)
A realtor studies the relationship between the size of a house (in square feet) and the property taxes owed by the owner. He collects the following data on six homes in an affluent suburb 60 miles outside of New York City. Use Table 2.
a. Calculate sxy and rxy. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. Calculate the value of the test statistic.
Calculate the value of the test statistic. (Round your intermediate calculations to 4 decimal places and final answer to 2 decimal places.)
Explanation / Answer
Sxy=Covariance= 6557730.611
Correlation rxy= 0.9229
Test statistic t=r*sqrt(n-2)/sqrt(1-r2)
=0.9229*sqrt(6-2)/sqrt(1-0.92292)
= 4.7947
Degree of freedom =n-2=6-2=4
p-value=0.0087 using excel function =TDIST(4.7947,4,2)
As p-value<0.05, we conclude correlation is significant