CAS Exam 7 Spring 2014, Question 21
Study guide: Exam 9
Given the following data:
| Class | Frequency | Severity |
|---|---|---|
| 1 | 0.20 | $15,000 |
| 2 | 0.05 | 25,000 |
| 3 | 0.40 | 5,000 |
| 4 | 0.25 | 3,000 |
| 5 | 0.10 | 12,000 |
Part a (1.5 points)
Calculate the Pearson product-moment correlation coefficient between the frequency and severity.
Part b (1.5 points)
Calculate the Kendall \tau statistic between the frequency and severity.
Part c (1 point)
Identify and briefly describe two potential weaknesses of the Pearson product-moment correlation coefficient as a measure of dependency.
Part d (0.5 points)
Briefly describe whether the use of the Kendall \tau statistic would address the weaknesses identified in part c. above.
Part e (0.5 points)
Briefly describe one advantage and one disadvantage of using a scatterplot to evaluate dependency instead of using the Kendall \tau statistic or the Pearson product-moment correlation coefficient.
Answer this question and see the worked solution