Question

Several factors determine the values and retail prices of retail diamonds. The following scatterplot describes the relationship between a diamond's retail price (in dollars) and its size (measured in carat weight) for 151 diamonds for sale at Cincinnati area retail stores during the Fall of 1999.

Which of the following is a reasonable estimate of the correlation, r, between Price and Size?
A. r = –.8
B. r = .8
C. r = 0
D. r = 1

Answer 1

If prices were reported in euros instead of U.S. dollars, the correlation r
A. would not change.
B. would increase.
C. would decrease.
D. may increase or decrease depending on the exchange rate of dollars with euros.


I say B and D.

Answer 2

Well, for the first question, it's a positive relation, so that rules out (A).

Answer 3

And it's pretty strong, but not perfect.

Answer 4

Yeah, that's why I say .8... I would actually think it was less, but I'm not going to argue :)

Answer 5

Yeah, 0.8 might be a little exaggerated, but it's certainly not any of the others.
For the second equation, think what would happen to the numbers on the vertical axis if you changed currency from dollars to euros.

Answer 6

imo it would change based on how many euros = a dollar. I say it could be either or... I doubt R will stay the same, it's possible tho.

Answer 7

All that would happen is the numbers would change values, the points on the scatterplot wouldn't move.

Answer 8

I guess you're right.... That makes sense... SO A?

Answer 9

Yep, the correlation between weight and price wouldn't change just because you're paying with a different currency.

Answer 10

I was thinking about the change itself, but forgot it affects everything the same, so it shouldn't change.