Statistics Assignment on Covariance, Correlation Coefficient, Hypothesis Testing, Measures of Central Tendency, and Probabilities

[Date]

Question 1
(a) Covariance between years of experience (x) and salary (y)
(b) No interpretation would be feasible for the covariance magnitude and hence, only the
direction (Sign) can be described. The negative direction is indicative of the fact that salary
would decrease as the year of experience increases. Thus, it can be said that negative
correlation is present between the variables.
(c) Computation of correlation coefficient or R
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The correlation coefficient is near by the perfect theoretical negative value which is -1. It
represents that the variables year of experience and corresponding salary is reversely
associated.
(d) Salaries are compressible in nature and therefore, the salary of individuals reduce as their
year of experiences increases. The main reason behind this reasoning is high competition in
the market and dynamic market structure.
Question 2
(a) Hypotheses
Claim of the company is that proportion of users of sinus drug experienced drowsiness is not
0.10.
(b) Hypothesis testing for the claim
Number of observation (n) = 900
Number of sample subjects which would be experienced drowsiness =81
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