Atul Sangal

Correlation Analysis

Q1. There is always a debate in business schools during placement week that the final
placements, in general are arbitrary and a candidate’s abilities do not really have any correlation
with the salary package offered to him/her. To test the correctness of the above assumption, a
sample of 30 students was randomly selected from an MBA class of a top business school. Their
marks were taken as measure of their academic performance. They were given standard test to
access them to three other parameters, communication ability, general awareness, and IQ level.
After the placement week, data regarding salary was collected. The data is given in table below:

General
Salary Marks Communication Awareness IQ
Student (Lacs p.a.) (Percentage) Score Score Score
1 5.5 65 88 78 105
2 16.5 90 93 95 120
3 4.5 65 63 56 100
4 7 68 79 66 100
5 3.5 67 58 77 100
6 6 62 85 87 110
7 4 84 77 44 105
8 7.5 82 78 66 105
9 2.75 75 53 68 100
10 10.5 81 95 54 115
11 5 74 68 50 110
12 9 88 78 78 115
13 4 65 63 45 100
14 4.5 84 68 56 100
15 2.5 68 58 43 95
16 8.5 71 89 68 110
17 12.5 92 91 76 120
18 3 53 55 71 100
19 8.75 77 77 77 100
20 6.5 68 79 45 105
21 13.5 89 89 56 115
22 5.5 68 64 43 100
23 4 63 62 40 100
24 5 65 69 55 100
25 7.6 74 71 68 105

Test the validity of the assumption that there is no correlation between the given variables.
Also find the correlation between salary and marks controlling for the effect of IQ level