Two Variables Have a Correlation Coefficient Equal to +0

question 56

Multiple Choice

Two variables have a correlation coefficient equal to +0.55 from a sample size of 8. Which one of the following statements describes the results of the hypothesis test that the population correlation coefficient is greater than zero using α = 0.05?

• A)Because the test statistic is less than the critical value, we can reject the null hypothesis and conclude that the population correlation coefficient is not greater than zero.
• B)Because the test statistic is less than the critical value, we fail to reject the null hypothesis and conclude that the population correlation coefficient is not greater than zero.
• C)Because the test statistic is greater than the critical value, we fail to reject the null hypothesis and conclude that the population correlation coefficient is not greater than zero.
• D)Because the test statistic is greater than the critical value, we can reject the null hypothesis and conclude that the population correlation coefficient is greater than zero.

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Definitions:

Horizontal Analysis

Horizontal analysis is a financial analysis technique that shows changes in the amounts of corresponding financial statement items over a period of time, aiding in the assessment of financial performance and trends.

Vertical Analysis

A financial analysis method that expresses each item in a financial statement as a percentage of a base amount, facilitating period-to-period and company-to-company comparisons.

Ratio Analysis

A technique for evaluating financial statements that expresses the relationship between selected financial statement data.

Total Debt

The sum of all short-term and long-term obligations owed by an entity, including bonds, loans, and other forms of financial liabilities.