A researcher records the odometer reading and price for a group of used Hondas.

Question

A researcher records the odometer reading and price for a group of used Hondas. What kind of correlation is likely to be obtained for these two variables? A positive correlation A negative correlation A correlation near zero A correlation near one If the Spearman correlation for a set of scores is equal to +1.00, then the Pearson correlation for the same scores would also be equal to +1.00. True False If the value of the Pearson correlation is r = +1.00 or -1.00, then all data points in a scatter plot fit perfectly on a straight line. True False

Explanation / Answer

Q38

Odometer reading is higher => the car has run more miles. This should normally lead to a lowering of the price the car can fetch, Thus, as odometer reading increases, price the car can fetch is expected to decrease = > the correlation between the two is negative. ANSWER option 2.

Q39

Spearman rank correlation is derived applying Pearson correlation formula on the ranks of the two variables. Hence, if Spearman rank correlation is 1, Pearson correlation will also be 1. So, the given statement is true. ANSWER option 1

Q40

Pearson correlation is + 1 => perfect positive correlation => all points on the scatter plot would lie on a straight line with positive slope. Pearson correlation is - 1 => perfect negative correlation => all points on the scatter plot would lie on a straight line with negative slope. Thus, if Pearson correlation is + 1 or – 1, all points on the scatter plot would lie on a straight line. So, the given statement is true. ANSWER option 1

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