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Question 301969: For 20 corporations, we found that the correlation coefficient between financial performance and the number of illegal actions detected is -.5. Test the null hypothesis that the population correlation coefficient is equal to zero, against the alternative hypothesis that it is less than zero. Use an alpha of 0.05. It is a _____ hypothesis test.
Is this a one tailed or two tailed hypothesis test?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! For 20 corporations, we found that the correlation coefficient between financial performance and the number of illegal actions detected is -.5. Test the null hypothesis that the population correlation coefficient is equal to zero, against the alternative hypothesis that it is less than zero. Use an alpha of 0.05.
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It is a bivariate regression hypothesis test.
Is this a one tailed or two tailed hypothesis test?
Ans: left-tail.
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Ho: rho = 0
Ha: rho < 0
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test stat: t = -0.5/[sqrt[(1-(-0.5)^2)/(20-2)) = -2.4495
p-value: P(t<-2.4495 with df=10) = 0.0121
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Conclusion: Since the p-value is less that 5%, reject Ho.
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Cheers,
Stan H.
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