Reading 11- LOS C : Q3 class, percent

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3.Consider a sample of 32 observations on variables X and Y in which the correlation is 0.30. If the level of significance is 5 percent, we:

A)   conclude that there is significant correlation between X and Y.

B)   conclude that there is little correlation between X and Y.

C)   cannot test the significance of the correlation with this information.

D)   conclude that there is no significant correlation between X and Y.

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The correct answer was D)

The calculated t = (0.30*√30)/√(1-0.09) = 1.72251 and the critical t values are ± 2.042. Therefore, we fail to reject the null hypothesis of no correlation.