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Amazon.com has become one of the most successful online merchants. Two measures of its success are sales and net income/loss figures (all figures in $million). These values for the years 1995–2007 are shown as follows.
a. Produce a scatter plot for Amazon’s net income/ loss and sales figures for the period 1995 to 2007. Does there appear to be a linear relationship between these two variables? Explain your response.
b. Calculate the correlation coefficient between Amazon’s net income/loss and sales figures for the period 1995 to 2007.
c. Conduct a hypothesis test to determine if a positive correlation exists between Amazon’s net income/ loss and sales figures. Use a significance level of 0.05 and assume that these figures form a random sample. |
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