Question

# USE THIS INFORMATION TO ANSWER QUESTIONS Ford GE Amazon 2016 10 - 6 2 2017 -...

USE THIS INFORMATION TO ANSWER QUESTIONS

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 (Ford-Mean of Ford)*(GE-Mean of GE) (GE-Mean of GE)*(Amazon-Mean 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 (Ford-Mean of Ford)*(GE-Mean of GE) -381 107 Correlation Coefficient between Ford and GE Total /[ (n-1)*standard Deviation of Ford*standard Deviation of GE] -0.9785 =>-381/((3*10.5515*12.3018) Correlation Coefficient between GE and Amazon Total / [(n-1)*standard Deviation of GE*standard Deviation of Amazon] 0.9849 =>107/(3*12.3017*2.9439)

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