For many home buyers and banks the correlation between homes selling price and square footage may or may not play a major factor in the overall potential of the home, but we can nonetheless examine the relationship between selling price and square footage.
We have chosen a random sample of 30 homes, and for each home we have recorded the selling price and square footage of each home. The sample correlation coefficient r for our data is approximately 0.46. Based on these sample results, test for a significant linear relationship between the two variables selling price of the home and square footage by doing a hypothesis test regarding the population correlation coefficient p. (Assume that the two variables have a bivariate normal distribution). Use the 0.10 level of significance, and perform a two-tailed test.
The null hypothesis: p = 0
The alternative hypothesis: p = 0.
Please refer to the attachment for fully formatted solution.
Null and Alternate Hypothesis:
Null Hypothesis: The price of home does not have a significant correlation with square footage.
Alternate Hypothesis: The price of home has a ...
The solutions assists in performing a regression hypothesis test on the data with the given research question.