CA Foundation · Quantitative Aptitude · Correlation and Regression
A scatter diagram of 30 observations shows points lying exactly on a straight line that falls from the upper left to the lower right. What is the value of the coefficient of correlation between the two variables?
The coefficient of correlation is -1. When every point lies exactly on a straight line sloping downward, the relationship is perfectly linear and inverse, which corresponds to perfect negative correlation.
- A-1Correct
- B0
- C+1
- D-0.5
Explanation
All points lie exactly on a line, so the linear relationship is perfect. The line has a negative slope, so the variables move in opposite directions. Hence r = -1. Choosing +1 ignores the direction of slope.
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