A sample of 20 pairs of bivariate data has a linear correlat

A sample of 20 pairs of bivariate data has a linear correlation coefficient of r = 0.65. Determine if a linear correlation exists or not. Use a 1% level of significance. Find the Decision Points(use Table I for levels of 1% and 5%).

Solution

degrees of freedom = n-2 = 18

For two tailed test with df = 18 and alpha = 0.01, critical values are (plus/minus) 0.561

Since our sample correlation coefficient is more than positive critiacal value, the correlation is significant at 1% level