For families who live in apartments the correlation between the family's income and the amount of rent they pay is r = 0.60. Which is true?
I. In general, families with higher incomes pay more in rent.
II. On average, families spend 60% of their income on rent.
III. The regression line passes through 60% of the (income$, rent$) data
Points.
A) I only
B) II only
C) I and II
D) I and III
E) I, II and III

Question

Quizplus · Accepted Answer

The correlation coefficient (r) measures the strength and direction of the linear relationship between two variables. In this case, the variable of interest is the family's income and the amount of rent they pay. The correlation coefficient of 0.60 indicates a moderate positive linear relationship, which means that as income increases, the amount of rent paid also tends to increase. However, this correlation does not imply anything about the average percentage of income spent on rent or the regression line passing through any specific data point. Therefore, only statement I is true.

For Families Who Live in Apartments the Correlation Between the Family's