Use the Rank Correlation Coefficient to Test for a Correlation

question 9

Essay

Use the rank correlation coefficient to test for a correlation between the two variables. Ten trucks were ranked according to their comfort levels and their prices.
$\begin{array} { c c c } \text { Make } & \text { Comfort } & \text { Price } \\\hline \text { A } & 1 & 6 \\\text { B } & 6 & 2 \\\text { C } & 2 & 3 \\\text { D } & 8 & 1 \\\text { E } & 4 & 4 \\\text { F } & 7 & 8 \\\text { G } & 9 & 10 \\\text { H } & 10 & 9 \\\text { I } & 3 & 5 \\\text { J } & 5 & 7\end{array}$
Find the rank correlation coefficient and test the claim of correlation between comfort and price. Use a significance level of 0.05 .

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Definitions:

Excess Reserves

Bank reserves in excess of the required minimum, which can be lent out or invested.

Total Reserves

The sum of all deposits, including cash, bank deposits, and investable assets, held by a financial institution or country.

Required Reserves

The minimum amount of reserves a bank must hold, as mandated by regulatory bodies, based on a percentage of the bank's deposit liabilities.

Money Supply

The total quantity of money available in the economy at a given time, including currency, deposits, and other liquid assets.