/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Problem 46 Five observations taken for two ... [FREE SOLUTION] | 91Ó°ÊÓ

91Ó°ÊÓ

Five observations taken for two variables follow. \\[\begin{array}{c|ccccc}x_{i} & 6 & 11 & 15 & 21 & 27 \\ \hline y_{i} & 6 & 9 & 6 & 17 & 12\end{array}\\] a. Develop a scatter diagram for these data. b. What does the scatter diagram indicate about a relationship between \(x\) and \(y ?\) c. Compute and interpret the sample covariance. d. Compute and interpret the sample correlation coefficient.

Short Answer

Expert verified
The scatter diagram shows no clear trend, sample covariance is 18.5 (indicating weak positive trend), and sample correlation coefficient is 0.523 (moderate positive correlation).

Step by step solution

01

Plot Scatter Diagram

To create a scatter diagram, plot the given coordinates in the form (x, y) on a graph. Use the points (6,6), (11,9), (15,6), (21,17), and (27,12). Place x-values on the horizontal axis and y-values on the vertical axis. Once plotted, you can visually assess any patterns or directions indicated by the points.
02

Analyze Scatter Diagram

Examine the plotted points to determine the pattern or relationship between x and y. Look for positive correlation (upward trend), negative correlation (downward trend), or no correlation (random spread). In this scatter diagram, the points show no clear linear trend, indicating a weak or no linear correlation.
03

Calculate Sample Covariance

Use the formula for sample covariance, \( s_{xy} = \frac{1}{n-1} \sum (x_i - \bar{x})(y_i - \bar{y}) \), where \( \bar{x} = \frac{\sum x_i}{n} \) and \( \bar{y} = \frac{\sum y_i}{n} \). Compute \( \bar{x} = 16 \) and \( \bar{y} = 10 \) for the datasets. Calculate each deviation \( (x_i - \bar{x}) \) and \( (y_i - \bar{y}) \), then find \( s_{xy} = \frac{1}{4} \sum (x_i - 16)(y_i - 10) = 18.5 \).
04

Interpret Sample Covariance

The positive sample covariance of 18.5 suggests a mild tendency of x and y to increase together, although the relationship is not strong or linear.
05

Calculate Sample Correlation Coefficient

Use the formula for sample correlation coefficient, \( r = \frac{s_{xy}}{s_x s_y} \), where \( s_x = \sqrt{\frac{1}{n-1} \sum (x_i - \bar{x})^2} \) and \( s_y = \sqrt{\frac{1}{n-1} \sum (y_i - \bar{y})^2} \). Compute \( s_x = 7.8 \) and \( s_y = 4.58 \). Substitute to find \( r = \frac{18.5}{7.8 \times 4.58} \approx 0.523 \).
06

Interpret Sample Correlation Coefficient

The sample correlation coefficient of 0.523 indicates a moderate positive correlation between x and y, meaning as x increases, y tends to increase as well, but not strongly.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91Ó°ÊÓ!

Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Scatter Diagram
A scatter diagram, also known as a scatter plot, is a type of graph that visually displays the relationship between two numerical variables. To create one, each pair of datapoints is plotted as a single point on a Cartesian coordinate system, where one variable is situated on the horizontal axis (usually axis x) and the other one is on the vertical axis (usually axis y). In our example, we are given pairs of data: \((6,6), (11,9), (15,6), (21,17), (27,12)\). When these points are plotted on a graph as given in the exercise, the pattern or direction of the data can suggest the degree and nature of the relationship between these variables.

By examining how the points cluster on the scatter diagram, one can assess whether there is a relationship between the variables. For instance, if the points roughly form an upward-sloping line, we might suspect a positive correlation. Conversely, a downward-sloping pattern suggests a negative correlation. In this case, the scatter diagram indicated no distinct directional trend, hinting at a weak or non-linear relationship between the x and y variables.
Sample Covariance
Sample covariance is a measure used in statistics to evaluate how two variables change together. It's computed using the formula: \[ s_{xy} = \frac{1}{n-1} \sum (x_i - \bar{x})(y_i - \bar{y}) \]Here, \(x_i\) and \(y_i\) are the individual sample points, while \(\bar{x}\) and \(\bar{y}\) are the respective mean values of x and y.

In the problem, we have mean values computed as \(\bar{x} = 16\) and \(\bar{y} = 10\). The deviations from these means are calculated for each data point, and then multiplied across the dataset to find the sample covariance of 18.5. A positive covariance, as in this case, suggests that the two variables tend to increase together. However, since the value is relatively small, it indicates that while there is a slight positive relationship, it's not strong or clear in linear terms.

Understanding sample covariance helps in gaining preliminary insights into how two variables might be interconnected, serving as a building block for more complex statistical analyses.
Correlation Coefficient
The correlation coefficient, often denoted as \(r\), is a numerical value that expresses the extent and direction of the linear relationship between two variables. It can range from -1 to +1. A value closer to +1 indicates a strong positive linear relationship, -1 indicates a strong negative linear relationship, and values close to 0 indicate no linear correlation.

The formula for calculating the sample correlation coefficient is:\[ r = \frac{s_{xy}}{s_x s_y} \]where \(s_{xy}\) is the sample covariance and \(s_x\) and \(s_y\) are the sample standard deviations for the respective x and y datasets.

In the given exercise, these calculations yield a correlation coefficient of approximately 0.523. This value suggests a moderate positive correlation between the variables x and y. It means that as x increases, there's a tendency for y to increase as well, albeit not with strong assurance. The correlation coefficient thus provides a useful, quantified snapshot of the relationship between two data sets, aiding in the interpretation of patterns that might be less obvious when analyzing the data visually.

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

The cost of consumer purchases such as housing, gasoline, Internet services, tax preparation, and hospitalization were provided in The Wall Street Journal, January 2, 2007. Sample data typical of the cost of tax-return preparation by services such as H\&R Block are shown here. \\[\begin{array}{lllll}120 & 230 & 110 & 115 & 160 \\ 130 & 150 & 105 & 195 & 155 \\ 105 & 360 & 120 & 120 & 140 \\\100 & 115 & 180 & 235 & 255\end{array}\\] a. Compute the mean, median, and mode. b. Compute the first and third quartiles. c. Compute and interpret the 90 th percentile.

Consider a sample with data values of \(27,25,20,15,30,34,28,\) and \(25 .\) Compute the 20 th, \(25 \mathrm{th}, 65 \mathrm{th},\) and 75 th percentiles.

Consider a sample with data values of \(10,20,21,17,16,\) and \(12 .\) Compute the mean and median.

A data set has a first quartile of 42 and a third quartile of \(50 .\) Compute the lower and upper limits for the corresponding box plot. Should a data value of 65 be considered an outlier?

Dividend yield is the annual dividend per share a company pays divided by the current market price per share expressed as a percentage. A sample of 10 large companies provided the following dividend yield data (The Wall Street Journal, January 16,2004 ). $$\begin{array}{lclc} \text { Company } & \text { Yield \% } & \text { Company } & \text { Yield \% } \\ \text { Altria Group } & 5.0 & \text { General Motors } & 3.7 \\ \text { American Express } & 0.8 & \text { JPMorgan Chase } & 3.5 \\ \text { Caterpillar } & 1.8 & \text { McDonald's } & 1.6 \\ \text { Eastman Kodak } & 1.9 & \text { United Technology } & 1.5 \\ \text { ExxonMobil } & 2.5 & \text { Wal-Mart Stores } & 0.7\end{array}$$ a. What are the mean and median dividend yields? b. What are the variance and standard deviation? c. Which company provides the highest dividend yield? d. What is the \(z\) -score for McDonald's? Interpret this z-score. e. What is the \(z\) -score for General Motors? Interpret this z-score. f. Based on z-scores, do the data contain any outliers?

See all solutions

Recommended explanations on Math Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.