Reference no: EM13574634

In a recent survey concerning company sales and net earnings. 15 companies responded with the following information.

Company	Sales ($ thousands)	Not Earnings ($ thousands)
OlgiCom	35.8                  1	.1.0
Cola Company	73.5	-2.5
0oftouch Co.	48.1	-14
Southwest Consulting	38.0	-0.8
SouthCo	51.9	-12
JenCo	45.8                I	-1.4
Financial Services     __	79.4	-4.1
Antique Accents	32.0	-1.4
Pace Design	529	-1.1
The Grayson Group	85.1	-2.1
Swan Furnace Cleaners	632	.2.9
SunEtlush Technologies	59.0	-12
JenStar	659	3.3
LText Tech	38.4	-0.9
PhotoFinish Co.	57.0	-20

a) Using your favorite statistical computing tools, find the coefficient of correlation for the data. For hill marks your answer should be accurate to at least three decimal places.

Note: For this question you can copy and paste the data into a spreadsheet application.

Coefficient of correlation: 0

b) Based on the coefficient of correlation. which of the following statements is most appropriate regarding the linear relationship between company sales and earnings?

The intervals for strong positive, moderate positive, weak positive, weak negative, moderate negative, and strong negative correlation all have the same length on the interval (-1,1).

• There is a strong positive relationship between sales and net earnings.
• There is a moderate positive relationship between sales and net earnings.
• There is a weak positive relationship between sales and net earnings.
• There is a weak negabve relationship between sales and net earnings.
• There is a moderate negabve retationship between sales and net earnings.
• There is a strong negabve relabonship between sales and net earnings.