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CA Foundation · Quantitative Aptitude · Correlation and Regression

A study finds that the number of ice-cream cones sold in Chennai and the number of cases of sunburn reported both rise during summer months. Which interpretation is most appropriate?

The correlation may arise from a common third factor such as hot weather. Correlation shows association only, not causation, so ice-cream sales do not cause sunburn even though both rise together in summer.

  1. AIce-cream sales cause sunburn, because the two rise together
  2. BThe correlation may be due to a common third factor, such as hot weather, and does not by itself prove causationCorrect
  3. CThe variables must be uncorrelated, since neither can cause the other
  4. DThe correlation coefficient must be exactly +1

Explanation

Both variables are driven by a common factor, the summer heat. Correlation measures only the degree of association and does not establish cause and effect. Option A wrongly infers causation from co-movement. A causal link is not needed for a correlation to exist, so C is wrong, and nothing suggests a perfect +1 value.

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