Question: Pick a minimum of 15 observations on any subject for two variables that you may think are either negatively or positively correlated. Attach a hard copy of the observations and do the following:
a. Tell whether before doing any calculating whether you think they are positively or negatively correlated. What is your rationale?
Example: I test for a correlation between the price of oranges and the number of oranges that consumers buy on 15 different dates. I hypothesis that there is a negative correlation between price and quantity because people like to buy goods at lower rather than higher prices.
b. Calculate the correlation coefficient either by using the formula (Show calculations) or with Excel (Attach output.).
c. Draw a graph of the two variables either by hand or by using Excel. (Do this by inserting an XY/Scatter chart.) Draw a straight line connecting the observations as well as possible. If the variables have a weak correlation, then the line will be fairly horizontal.