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Ford GE Amazon
2016 10  6 2
2017  5 13 6
2018 14  5 1
2019  7 18 7
#1 Find the sample correlation coefficient of the return on Ford and the return on GE.
a. 
 .5739 

b. 
 .6833 

c. 
 .9785 

d. 
none of these 
#2 What is the sample correlation coefficient of the return on GE and the return on Amazon.
.3218 

.4163 

.9849 

None of these 
1) The correct answer is option C i.e. .9785
2) The correct answer is option C i.e. .9849
Year  Ford  GE  Amazon  (FordMean of Ford)*(GEMean of GE)  (GEMean of GE)*(AmazonMean of Amazon)  
2016  10  6  2  77  22  
2017  5  13  6  64  16  
2018  14  5  1  110  30  
2019  7  18  7  130  39  
Mean  3  5  4  => average of returns  
Standard Deviation  10.5515  12.3018  2.9439  => using STDEV.S formula  
Total of (FordMean of Ford)*(GEMean of GE)  381  107  
Correlation Coefficient between Ford
and GE Total /[ (n1)*standard Deviation of Ford*standard Deviation of GE] 
0.9785  =>381/((3*10.5515*12.3018)  
Correlation Coefficient between GE and
Amazon Total / [(n1)*standard Deviation of GE*standard Deviation of Amazon] 
0.9849  =>107/(3*12.3017*2.9439) 
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