Question

When homeowners list their home for sale, they begin by listing it for a price that is greater

than what they expect to receive. The longer a home is on the market, without being sold, the
more the price drops. A realtor selects 50 homes that are currently listed for sale. A
scatterplot reveals that the association between x = the number of days the home is on the
market and y = the current asking price ($) is fairly linear and can be modeled by the
equation ý = 245, 000 – 200x. Additionally, 85.4% of the variation in the current
asking price can be explained by this linear model. Which of the following is the value of the
correlation (r) for the relationship between x and y?

Answer 1

-0.924

Explanation:

The magnitude of the correlation coefficient is the square root of the variation.

|r| = √0.854

|r| = 0.924

The sign of the correlation coefficient is the same as the slope of the line of best fit. In this case, it's negative.

r = -0.924