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Using state data (n = 50) for the year 2000, a statistics student calculated a matrix of correlation coefficients for selected variables describing state averages on the two main scholastic aptitude tests (ACT and SAT). (a) In the spaces provided, write the two-tailed critical values of the correlation coefficient for α = .05 and α = .01 respectively. Show how you derived these critical values. (b) Mark with * all correlations that are significant at α = .05, and mark with ** those that are significant at α = .01. (c) Why might you expect a negative correlation between ACT% and SAT%? (d) Why might you expect a positive correlation between SATQ and SATV? Explain your reasoning. (e) Why is the matrix empty above the diagonal?
Correlation Matrix ( states
average composite score
= percent of high school grads taking the ACT
SAT\% = percent of high school graduates taking SAT test
= average SAT quantitative test score
SATV = average SAT verbal test score
Critical value for
Critical value for
Initial Investments
The upfront capital put into a project or business to get it started.
Income Taxes
Taxes imposed by the government on individuals or entities based on their net income or profit.
After-Tax Discount Rate
This refers to the rate of return on an investment after accounting for taxes, used in capital budgeting to assess the value of future cash flows.
Income Tax Rate
The proportion of an entity's or person's income that is subject to taxation.
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