Question

Auction bids The author is a member of the board of directors of a nonproht on that held a fund-raising auction. He recorded the opening bids suggested by the auctioneer and the final winning bids for several items. The amounts are listed below. Is there sufficient evidence to conclude that there is a linear correlation between the opening bids suggested by the auctioneer and the final winning bids? Assume test statistic is t=0.947. a =0.01 Find Critical value and state your conclusion; there is a linear correlation between the opening bids or NOT? Opening Bid 1500 500 500 300 Winning Bid 650 175 125 125 CV.t-+0.99 Support, there is a correlation O CV.t-10.878 Reject the claim CV. 0.878 Support the claim

Answer 1

Here sample size for each group is n= 4

Level of significance $\alpha$ = 0.01

Then from critical value table of correlation coefficient , critical value for n= 4 and $\alpha$ =0.01 is

C.V = $\pm$ 0.99

Clearly test Statistic 0.947 is less than 0.99

So there is evidence of no correlation.

Correct option

CV t = $\pm$ 0.99 , Reject the claim that there is a correlation .