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8.13. Table 13-6 gives data on the number of new business incorporations (Y) and t number of business failures (X) for the United States from
8.13. Table 13-6 gives data on the number of new business incorporations (Y) and t number of business failures (X) for the United States from 1984 to 1995. a. What is the average value of new business incorporations? And the varianc b. What is the average value of business failures? And the variance? c. What is the covariance between Y and X? And the correlation coefficier TABLE B-6 NUMBER OF NEW BUSINESS INCORPORATIONS (Y) AND NUMBER OF BUSINESS FAILURES (X), UNITED STATES, 1 984-1 995 YEAH Y X 1 984 634,991 52,078 1 985 664,235 57,253 1 986 702,738 61 .61 6 1 987 685,572 61 ,1 1 1 1 988 685,095 57,097 1 989 676,565 50,361 1 990 647,366 60,747 1 991 628,604 88,140 1 992 666,800 97,069 1 993 706,537 86,1 33 1994 741 ,778 71 .558 1 995 766,988 71 ,128 Souroe: Econmnic Repon of the President, 2004, Table 396. p. 395. )IXES d. Are the two variables independent? e. If there is correlation between the two variables, does this mean that one variable causes the other variable? That is, do new incorporations cause business failures, or vice versa? PROBLEMS C.10. Profits (X) in an industry consisting of 100 firms are normally distributed with a mean value of $1.5 million and a standard deviation (s.d.) of $120,000. Calculate a. P(X
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