Pearson product-moment correlation

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Reference no: EM131021389

How strong is the correlation between the inflation rate and 30-year treasury yields? The following data published by Fuji Securities are given as pairs of inflation rates and treasury yields for selected years over a 35-year period.

Inflation rate (%)	30-year treasury yield (%)
1.57	3.05
2.23	3.93
2.17	4.68
4.53	6.57
7.25	8.27
9.25	12.01
5.00	10.27
4.62	8.45

Compute the Pearson product-moment correlation coefficient to determine the strength of the correlation between these two variables. Comment on the strength and direction of the correlation.

Reference no: EM131021389

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