Interpret the spearman rank correlation coefficient

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Reference no: EM131798031

You are interested in whether the returns on Asset A are negatively correlated with the returns on Asset B. Consider the following annual return data on the two assets:

1350_interpret the Spearman rank correlation coefficient.png

a. Calculate and interpret the Spearman rank correlation coefficient rs.

b. Specify the competing hypotheses in order to determine whether the asset returns are negatively correlated.

c. At the 1 % significance level, specify the critical value.

d. What is the conclusion to the test? Are the returns negatively correlated?

Reference no: EM131798031

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