Skip to content

CA Foundation · Quantitative Aptitude · Correlation and Regression

For 9 paired observations of price and demand of a product, the signs of the deviations (dx, dy) from the previous value give the following: 8 pairs of deviations, of which 6 have the same direction (c = 6). What is the coefficient of concurrent deviation?

The coefficient is not simply 0.5; the formula gives √((2c−N)/N) = √(4/8) = √0.5 ≈ 0.707, positive.

  1. A0.5Correct
  2. B0.25
  3. C-0.5
  4. D0.75

Explanation

With 9 observations, N = 8 pairs of deviations. r_c = ±√(±(2c − N)/N) = √((12 − 8)/8) = √0.5 ≈ 0.707. Since 2c − N is positive, the sign is positive. Checking: 2c − N = 4, 4/8 = 0.5 is the value inside the root, so r_c = +√0.5, not 0.5.

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