Reading 11- LOS A (Part 2): Q8 interpret, standard, style

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8.Determine and interpret the correlation coefficient for the two variables X and Y. The standard deviation of X is 0.05, the standard deviation of Y is 0.08, and their covariance is –0.003.

A)   –1.33 and the two variables are negatively associated.

B)   +0.75 and the two variables are positively associated.

C)   –0.75 and the two variables are negatively associated.

D)   +1.33 and the two variables are positively associated.

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The correct answer was C)

The correlation coefficient is the covariance divided by the product of the two standard deviations, i.e. –0.003 divided by (0.08 × 0.05).