Question 2.27

2.27 Companies of the world

Refer to Exercise 1.118 (page 61), where we examined data collected by the World Bank on the numbers of companies that are incorporated and are listed on their country’s stock exchange at the end of the year. In Exercise 2.10 (page 71), you examined the relationship between these numbers for 2012 and 2002.

  1. Find the correlation between these two variables.
  2. Do you think that the correlation you computed gives a good numerical summary of the strength of the relationship between these two variables? Explain your answer.