Question

A manager of a local retail store analyzes the relationship between advertising and sales by reviewing the store’s data for the previous six months.

Advertising	Sales
(in $100s)	(in $1,000s)
28	23
32	25
24	18
24	15
26	19
30	23

1.a. Calculate the standard deviation of advertising and the standard deviation of sales. (Round your answers to 2 decimal places.)

Standard Deviation for Advertising _________

Standard Deviation for Sales__________

1.b. Calculate the covariance between advertising and sales. (Round your answer to 2 decimal places.)

Covariance ________

1.c. Interpret the covariance between advertising and sales.

• No correlation

• Positive correlation

• Negative correlation

d. Calculate the correlation coefficient between advertising and sales. (Round your answer to 2 decimal places.)

Correlation coefficient_________

Answer 1

d) x = Advertise, y = sales

correlation coefficient = 0.94