Question

Consider the following sample data for the relationship between advertising budget and sales for Product A: Observation 1 2 3 4 5 6 7 8 9 10 Advertising ($) 30,000 30,000 40,000 50,000 50,000 50,000 60,000 70,000 80,000 80,000 Sales ($) 179,000 183,000 253,000 308,000 301,000 308,000 376,000 418,000 486,000 499,000 What is the correlation value for the relationship between advertising and sales? Please round your answer to the nearest hundredth. Note that the correct answer will be evaluated based on the full-precision result you would obtain using Excel.

Answer 1

Question:The following sample data for the relationship between advertising budget and sales for Product A.

Observation	Advertising ($)	Sales($)
1	30,000	1,79,000
2	30,000	1,83,000
3	40,000	2,53,000
4	50,000	3,08,000
5	50,000	3,01,000
6	50,000	3,08,000
7	60,000	3,76,000
8	70,000	4,18,000
9	80,000	4,86,000
10	80,000	4,99,000

What is the correlation value for the relationship between advertising and sales?

Answer:

We have to find correlation between advertising and sales for product A.

The correlation between advertising and sales is 0.9982 (=1.0)

There is perfect positive correlation between advertising and sales for product A..

Explanation:

formula The correlation relationship between Los advertising (5) and cesaless) can be calculated by wing following Corr(x,y) = Cox(x,y) X - Advertising & Y - Sales Where cov(x,y) = + x;ři - F 8x = b. Exi2=X? y = 1 { 1,2 - from data, (by using excel function to covex,y) = 1865600000 andolu OVO 8x = 17435.59 sy = 107188. 106 There fore to 18656ooooo corol(x,y) = 17435-59 (107188100) 0.99824 ( Rounded nearest hundredth) There are perfect positive correlation between advertising and sales for product A - TO