Question 1
A company records monthly advertising spend (, in thousands of dollars) and monthly sales (, in thousands of dollars) for 10 months. The GDC output gives . Which statement best describes this correlation?No clue? Show me the answer
Correct answer
Correct!
IncorrectStep-by-step walkthrough
Choose a solution method
Method #1Worked solutionStep 1: Locate the value
We are given , which is positive and close to 1.
Step 2: Apply the guideline table
Since , this falls in the 'strong positive correlation' band.
Step 3: State conclusion
A strong positive linear correlation exists between advertising spend and sales.
Step 4: Choose option
This matches option B.
Method #2Why the others are wrongStep 1: Option A
Weak positive would require between 0 and 0.5, not 0.87.
Step 2: Option C
Negative correlation requires a negative value, but .
Step 3: Option D
No correlation would mean , not 0.87.
Step 4: Confirm
Only strong positive correctly matches .
Question 2
A scatter diagram of a car's age (, years) against its resale value (, thousands of dollars) shows points sloping downward, tightly clustered around a straight line. Which correlation coefficient value is most consistent with this diagram?No clue? Show me the answer
Correct answer
Correct!
IncorrectStep-by-step walkthrough
Choose a solution method
Method #1Worked solutionStep 1: Direction
Points slope downward, so as increases, decreases — a negative correlation.
Step 2: Strength
Points are tightly clustered around a line, indicating a strong correlation, so should be close to 1.
Step 3: Combine
Negative and strong means close to .
Step 4: Choose option
matches both direction and strength.
Method #2Why the others are wrongStep 1: Option A
is positive, implying an upward slope, which contradicts the description.
Step 2: Option C
is far too close to zero for a tightly clustered pattern.
Step 3: Option D
has both wrong sign and wrong magnitude.
Step 4: Confirm
Only fits a strong, negative, linear pattern.