20 Questions
Which statistical test is used to assess the strength of the linear relationship between two variables?
Parametric test
What can we conclude if the relationship between two variables is found to not result from chance?
There is a strong linear relationship between the variables
Which type of data cannot be tested using the methods discussed in the first lesson?
Categorical data
What type of test can be performed to test the relationship between categorical or discrete data?
Chi-square test
What are the most common hypotheses concerning correlation?
The population correlation coefficient is equal to zero
Which symbol represents the population correlation coefficient?
$\rho$
What type of hypotheses can be made concerning the population correlation coefficient?
Both one-sided and two-sided hypotheses
Which test statistic is used to test the independence of categorical or discrete data?
Chi-square test
Which type of test is used to evaluate the correlation between two variables when the assumptions of a parametric test are not met?
Non-parametric test
What can we use the information about the relationship between two variables for?
Modeling or forecasting using regression models
Which of the following is the correct formula for the sample correlation, rXY?
rXY = s_XY / (sX * sY)
Which of the following is the correct formula for the t-test statistic for testing the null hypothesis H0: ρ = 0?
t = r * sqrt((n - 2) / (1 - r^2))
Which of the following is true about the t-test statistic for testing the null hypothesis H0: ρ = 0?
The magnitude of r needed to reject the null hypothesis decreases as sample size n increases.
What is the degrees of freedom for the t-test statistic used to test the null hypothesis H0: ρ = 0?
n - 2
Which of the following is true about the significance of the t-test for a given sample correlation coefficient and sample size?
As the sample size increases, significance is more likely to be indicated.
What is the critical value of the t-statistic for a two-sided alternative hypothesis at the 0.05 level?
±2.228
What is the critical value of the t-statistic for a one-sided alternative hypothesis at the 0.05 level?
1.645
What is the sample size required for a sample correlation coefficient of r = 0.35 to yield a t-statistic just significant at the 0.05 level?
32
What is the sample correlation coefficient required for a sample size of n = 12 to yield a t-statistic not different from zero at the 0.05 level?
0.35
What is the name often used to refer to the parametric pairwise correlation coefficient?
Pearson correlation
Test your knowledge on assessing and testing the correlation between variables in investments. This quiz covers parametric and non-parametric approaches to evaluating the strength of linear relationships. Challenge yourself and enhance your understanding of correlation coefficients.
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