In management, many numeric measures are related (either strongly or loosely) to one another. Lewis, a...

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In management, many numeric measures are related (either strongly or loosely) to one another. Lewis, a business analyst, believes that capital utilisation (as measured by inventory turnover) has a direct effect on a company's earnings yield. To examine this belief, Lewis randomly surveyed nine JSE-listed companies and recorded their inventory turnover and their earning yield. Inventory Turnover Earnings Yield 3 10 5 12 4 8 7 13 6 15 4 10 8 16 6 13 5 10 Compute and interpret the strength of the association between inventory turnover and earnings yield using: a. Pearson's correlation coefficient. (15) In management, many numeric measures are related (either strongly or loosely) to one another. Lewis, a business analyst, believes that capital utilisation (as measured by inventory turnover) has a direct effect on a company's earnings yield. To examine this belief, Lewis randomly surveyed nine JSE-listed companies and recorded their inventory turnover and their earning yield. Inventory Turnover Earnings Yield 3 10 5 12 4 8 7 13 6 15 4 10 8 16 6 13 5 10 Compute and interpret the strength of the association between inventory turnover and earnings yield using: a. Pearson's correlation coefficient. (15)

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To compute Pearsons correlation coefficient between inventory turnover and earnings yield we need to calculate the covariance and variances of the two ... View the full answer