Use the tables below to calculate Covmw teenwage Please show

Use the tables below to calculate Cov(mw, teen_wage). Please show all of your work.

Use the tables below to calculate Cov(mw, teen_wage).

Solution

Cov(mw, teen_wage) = Corr(mw, teen_wage) * SD(mw) *SD(teen_wage)

Corr: Coefficient of correlation, can e found out from the correlation matrix (the 3rd table in the image) at the intersection of row teen_wage and column mw. Corr(mw, teen_wage) = 0.7024

SD : Standard deviation

SD(mw) = 1.021876 (from 1st table)

SD(teen_wage) = 1.300935

Cov(mw, teen_wage) = 0.7024*1.021876*1.300935 = 0.933767