Question

A baseball analyst is looking to see if there is a relationship between a team's payroll (in millions
of dollars) and the number of losses the team had during the season. Six randomly selected teams are
shown. Using c = .01, test for correlation between the variables. E

Team Payroll (X)	143	140	81	64	192	164
Losses (Y)	67	75	93	82	75	58
XY
X2
Y2

a) State the hypotheses for this test:
b) Find the critical value of r for c = 0.05
c) Compute the correlation coefficient.

d) What is the decision?
e) Summary statement:

Answer 1

A.

H₀: = 0

H₁: 0

B.

df = n-2

= 4

Critical r value = 0.811 (using r value table)

C.

So,

r = -0.6857

D.

Since |r| < 0.811

i.e. we fail to reject the null hypothesis.

E.

Hence we can't say that the correlation is significant.

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