What is the probability that the indicator would be correct 37 or more times in 46 years?

Spurious correlation refers to the apparent relationship between variables that either

has no true relationship or are re-related to other variables that have not been

measured. One widely publicized stock market indicator in the United States that is an

example of spurious correlation is the relationship between the National Football

League Super Bowl winner and the per- performance of the Dow Jones Industrial

Average in that year. The indicator states that when a team that existed before the

National Football League merged with the American Football League wins the Super

Bowl, the Dow Jones Industrial Average will increase in that year. Since the first Super

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Bowl was held in 1967 through 2012, the indicator has been correct 37 out of 46 times.

Assuming that this indicator is a random event with no predictive value, you would

expect that the indicator would be correct 50% of the time.

Questions:

1. What is the probability that the indicator would be correct 37 or more times in 46 years?

2. What does this tell you about the usefulness of this indicator?