Amazon.com has become one of the most successful online merchants. Two measures of its success are sales and net income/loss figures (all figures in $million). These values for the years 1995€“2007 are shown as follows.

a. Produce a scatter plot for Amazon€™s net income/ loss and sales figures for the period 1995 to 2007. Does there appear to be a linear relationship between these two variables? Explain your response.
b. Calculate the correlation coefficient between Amazon€™s net income/loss and sales figures for the period 1995 to 2007.
c. Conduct a hypothesis test to determine if a positive correlation exists between Amazon€™s net income/ loss and sales figures. Use a significance level of 0.05 and assume that these figures form a random sample.

Transcribed Image Text:

Yea Ne Income/Loss Saes -0.3 0.5 1995 1996 1997 1998 1999 2000 2001 15.7 -275 -124.5 -719.9 147.7 609.8 1.639.8 2.761.9 3,122.9 3.933 5,263.7 6,921 8.490 10,711 14.835 -1.411.2 -567.3 -149.1 35.3 2003 2004 2005 2006 2007 588.5 359 190 476