Use the following to answer the question(s) below.
In order to examine if there is a relationship between the size of cash bonuses and pay scale, data were obtained on the average annual cash bonus and the average annual pay for a sample of 20 companies. Below is the regression analysis output with annual cash bonus as the dependent variable.
-At 5% significance level, which of the following statements is true about the correlation between average annual cash bonus and average annual pay?
A) It is not significantly different from zero.
B) It is negative but not significantly different from zero.
C) It is positive and significantly different from zero.
D) It is negative and significantly different from zero.
E) Cannot be determined from the information given.

Question

Use the following to answer the question(s) below.
In order to examine if there is a relationship between the size of cash bonuses and pay scale, data were obtained on the average annual cash bonus and the average annual pay for a sample of 20 companies. Below is the regression analysis output with annual cash bonus as the dependent variable. 
-At 5% significance level, which of the following statements is true about the correlation between average annual cash bonus and average annual pay?
A) It is not significantly different from zero. 
B) It is negative but not significantly different from zero. 
C) It is positive and significantly different from zero. 
D) It is negative and significantly different from zero. 
E) Cannot be determined from the information given.

Quizplus · Accepted Answer

The p-value for the coefficient of the independent variable (average annual pay) is 0.013 which is less than the significance level of 0.05. Therefore, we can reject the null hypothesis of no correlation and conclude that there is a statistically significant positive correlation between average annual cash bonus and average annual pay.

Use the Following to Answer the Question(s) Below