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hw3 sol - 1.a Summary statistics of UECHANGE Column1 Mean...

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1.a Summary statistics of UECHANGE Column1 Mean -0.019148936 Standard Error 0.130877572 Median -0.2 Mode -0.5 Standard Deviation 0.89725143 Sample Variance 0.80506013 Kurtosis 1.83795692 Skewness 0.989218085 Range 5 Minimum -2.1 Maximum 2.9 Sum -0.9 Count 47 Confidence Level(95.0%) 0.263442885 VALUE APPROXIMATE EXCEL FORMULA The maximum value undertaken by UECHANGE is 2.9, occuring in 1975. It might be due to the recession happened in the mid-1970s. 1.b Covariance of UECHANGE and GDPGROWTH -1.49711 (n/(1-n)) * COVAR(UECHANGE,GDPGROWTH) 1.c Correlation of UECHANGE and GDPGROWTH -0.82927 It implies a negative association between the two variables. We can not say strong or weak of this association only from the number of covariance. It implies a negative association between the two variables. The association is strong. The benefit of correlation over covariance is that it is in common units, allowing us to directly interpret the strength of the relationship.
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