Use the following to answer the question(s) below.
Below is Excel output showing the coefficient of correlation between personal income and vacation expenses (both in $thousands) for a large sample of clients of one travel agency in Toronto.
-Which of the following statements are false?
A) The correlation coefficient of 0.691 indicates a relatively strong positive linear association.
B) The correlation coefficient of 0.691 has no units.
C) If we swap the variables, the correlation coefficient will still be equal to 0.691.
D) Correlation is not sensitive to scaling the data. So, new scaling has no effect on the value of the correlation coefficient. It will remain unchanged.
E) If we swap the variables, the correlation coefficient will be equal to 1.447.

Question

Use the following to answer the question(s) below.
Below is Excel output showing the coefficient of correlation between personal income and vacation expenses (both in $thousands) for a large sample of clients of one travel agency in Toronto. 
-Which of the following statements are false?
A) The correlation coefficient of 0.691 indicates a relatively strong positive linear association. 
B) The correlation coefficient of 0.691 has no units. 
C) If we swap the variables, the correlation coefficient will still be equal to 0.691. 
D) Correlation is not sensitive to scaling the data. So, new scaling has no effect on the value of the correlation coefficient. It will remain unchanged. 
E) If we swap the variables, the correlation coefficient will be equal to 1.447.

Quizplus · Accepted Answer

Statement A is true.
Statement B is true, as the correlation coefficient is a unitless measure.
Statement C is false. The correlation coefficient may change if the variables are swapped, as the regression line will also change.
Statement D is false. Correlation is sensitive to scaling, so changing the scale of the data may affect the value of the correlation coefficient.
Statement E is true. The correlation coefficient between personal income and vacation expenses is the same as the correlation coefficient between vacation expenses and personal income, so swapping the variables does not affect the value of the correlation coefficient. Therefore, statement E is true.

Use the Following to Answer the Question(s) Below