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CA Foundation · Quantitative Aptitude · Correlation and Regression

A scatter diagram of the marks of 30 students in Accounting (X) and Business Laws (Y) shows all points lying exactly on a straight line that slopes downward. Which value of the correlation coefficient r matches this diagram?

The correct value is r = -1. When every point lies exactly on a straight line, the correlation is perfect in magnitude, and a downward slope shows the variables move in opposite directions, which makes the coefficient negative.

  1. Ar = 0
  2. Br = +1
  3. Cr = -1Correct
  4. Dr = -0.5

Explanation

All points lying exactly on a straight line means the correlation is perfect, so |r| = 1. A downward slope means the variables move in opposite directions, so the sign is negative. Thus r = -1. r = +1 would need an upward slope.

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