4.Consider a sample of 60 observations on variables X and Y in which the correlation is 0.42. If the level of significance is 5 percent, we:

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

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

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

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

The correct answer was A)

The calculated t is t = (0.42*√58)/√0.8236 = 3.5246 and the critical t is approximately 2.000. Therefore, we reject the null hypothesis of no correlation.