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The scatter chart in the following figure was created using sample data for profits and market capitalizations from sample of firms in the Fortune 500 Click on the datafile logo to reference the data_ DATA filet DQUOO 160OO I 1200 3 80O 1 40OO 4000 800 1200 Pwfits ( milions) I6Q0 (a) Discuss what does this scatter chart indicates about the relationship between profits and market capitalization? The scatter chart indicates that there may be linear relationship between profits and market capitalization_ positive (b) The data used to produce this are contained in the file Fortunesoo: Calculate the covariance between profits and market capitalization_ If required_ round your answer to an integer: If your answer is negative use minus sign- Discuss what does the covariance indicates about the relationship between profits and market capitalization? This indicates that there is positive relationship between profits and market capitalization_ (c) Calculate the correlation coefficient between profits and market capitalization_ If required_ round your answer to four decimal places_ If your answer is negative use minus sign" . 0.8229 What does the correlations coefficient indicate about the relationship between profits and market capitalization? This indicates that there is between profits and market capitalization, strong linear relationship

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