CA Foundation · Quantitative Aptitude · Correlation and Regression
In a scatter diagram of the marks in Accounting (X) and Law (Y) of 50 students, the points are widely scattered over the whole graph with no discernible upward or downward trend. What does this indicate?
It indicates little or no linear correlation. When points are scattered randomly without any upward or downward trend, the two variables show no systematic linear association, so the coefficient of correlation is close to zero.
- APerfect positive correlation
- BHigh negative correlation
- CLittle or no linear correlationCorrect
- DPerfect negative correlation
Explanation
A shapeless cloud with no trend means that changes in X are not systematically associated with changes in Y. So r is near zero, indicating little or no linear correlation. High correlation, positive or negative, would show a clear tilted band.
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