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    Coefficient of Correlation and Determination: Size vs. Selling Price of Homes

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    A sample of 12 homes sold last week in St. Paul, Minnesota, is selected. Can we conclude that as the size of the home (reported below in thousands of square feet) increases, the selling price (reported in $ thousands) also increases?

    Home Size Selling Price Home Size Selling Price
    thousands of ($ thousands) Thousands of ($ Thousands)
    square feet Square Feet
    1.4 100 1.3 110
    1.3 110 0.8 85
    1.2 105 1.2 105
    1.1 120 0.9 75
    1.4 80 1.1 70
    1.0 105 1.1 90

    a) Compute the coefficient of correlation.
    b) Determine the coefficient of determination.
    c) Can we conclude that there is a positive association between the size of the home and the selling price? Use the .05 significance level.

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