Skip to content

CA Foundation · Quantitative Aptitude · Correlation and Regression

Five trainee analysts at a Mumbai brokerage were ranked by two examiners. Examiner A's ranks were 1, 2, 3, 4, 5 and Examiner B's ranks for the same trainees were 2, 1, 4, 3, 5. What is Spearman's rank correlation coefficient?

Spearman's rank correlation is 0.8. The squared rank differences add up to 4, so R = 1 − 6×4/(5×24) = 1 − 0.2 = 0.8. This shows strong positive agreement between the two examiners' rankings of the five trainees.

  1. A0.2
  2. B0.6
  3. C0.8Correct
  4. D0.96

Explanation

Differences d are −1, 1, −1, 1, 0, so Σd² = 4. R = 1 − 6Σd²/[n(n² − 1)] = 1 − (6 × 4)/(5 × 24) = 1 − 0.2 = 0.8. The value 0.2 results from forgetting to subtract the fraction from 1.

Did you get it right without looking?

One question tells you little. A timed set on Correlation and Regression shows your real accuracy, how long you take and where you lose marks.

Practise Correlation and RegressionFree diagnostic mock

More Correlation and Regression questions