MCQs Unit 4 Correlation and Regression

FY BBA Business Statistics - Unit 4.
Correlation and Regression

Multiple Choice Questions
1. A process by which we estimate the value of dependent variable

on the basis of one or more independent variables is called:
(a) Correlation
(b) Regression
(c) Residual
(d) Slope
2. The method of least squares dictates that we choose a

regression line where the sum of the square of deviations of the
points from the lie is:
(a) Maximum
(b) Minimum
(c) Zero
(d) Positive
3. A relationship where the flow of the data points is best

represented by a curve is called:
(a) Linear relationship

(b) Nonlinear relationship
(c) Linear positive
(d) Linear negative
4. All data points falling along a straight line is called:
(a) Linear relationship

(b) Non linear relationship
(c) Residual
(d) Scatter diagram
5. The value we would predict for the dependent variable when the
independent variables are all equal to zero is called:
(a) Slope
(b) Sum of residual
(c) Intercept
(d) Difficult to tell
6. The predicted rate of response of the dependent variable to

changes in the independent variable is called:
(a) Slope
(b) Intercept
(c) Error
(d) Regression equation
7. The slope of the regression line of Y on X is also called the:
(a) Correlation coefficient of X on Y

(b) Correlation coefficient of Y on X
(c) Regression coefficient of X on Y
(d) Regression coefficient of Y on X
8. In simple linear regression, the numbers of unknown constants
are:
(a) One
(b) Two
(c) Three
(d) Four
9. In simple regression equation, the numbers of variables involved

are:
(a) 0
(b) 1
(c) 2
(d) 3
10. If the value of any regression coefficient is zero, then two

variables are:
(a) Qualitative
(b) Correlation
(c) Dependent
(d) Independent
11. The straight line graph of the linear equation Y = a+ bX, slope
will be upward if:
(a) b=0
(b) b<0
(c) b>0
(d) b≠0
12. The straight line graph of the linear equation Y = a + bX, slope
will be downward If:
(a) b>0
(b) b<0
(c) b=0
(d) b≠0
13. The straight line graph of the linear equation Y = a + bX, slope
is horizontal if:
(a) b=0
(b) b≠0
(c) b=1
(d) a=b
14. If regression line of = 5, then value of regression coefficient of Y

on X is:
(a) 0
(b) 0.5
(c) 1
(d) 5
15. If Y = 2 - 0.2X, then the value of Y intercept is equal to:
(a) -0.2
(b) 2
(c) 0.2X
(d) All of the above
16. If one regression coefficient is greater than one, then other will
be:
(a) More than one

(b) Equal to one
(c) Less than one
(d) Equal to minus one
17. To determine the height of a person when his weight is given is:
(a) Correlation problem

(b) Association problem
(c) Regression problem
(d) Qualitative problem
18. The dependent variable is also called:
(a) Regression
(b) Regressand
(c) Continuous variable
(d) Independent
19. The dependent variable is also called:
(a) Regressand variable

(b) Predictand variable
(c) Explained variable
(d) All of these
20. The independent variable is also called:
(a) Regressor
(b) Regressand
(c) Predictand
(d) Estimated
21. In the regression equation Y = a+bX, the Y is called:
(a) Independent variable

(b) Dependent variable
(c) Continuous variable
(d) None of the above
22. In the regression equation X = a + bY, the X is called:
(a) Independent variable

(b) Dependent variable
(c) Qualitative variable
23. In the regression equation Y = a +bX, a is called:
(a) X-intercept
(b) Y-intercept
(c) Dependent variable
24. The regression equation always passes through:
(a) (X, Y)
(b) (a, b)
(c) (X̅ ,ȳ)
(d) (X̅ , Y)
25. The independent variable in a regression line is:
(a) Non-random variable

(b) Random variable
(c) Qualitative variable
26. The graph showing the paired points of (X i, Y i ) is called:
(a) Scatter diagram

(b) Histogram
(c) Historigram
(d) Pie diagram
27. The upward graph represents the relationship that is:
(a) Linear
(b) Non linear
(c) Curvilinear
(d) No relation
28. The downward graph represents the relationship that is:
(a) Linear positive

(b) Linear negative
(c) Non-linear
(d) Curvilinear
29. When regression line passes through the origin, then:
(a) Intercept is zero

(b) Regression coefficient is zero
(c) Correlation is zero
(d) Association is zero
30. When bXY is positive, then bYX will be:
(a) Negative
(b) Positive
(c) Zero
(d) One
31. The correlation coefficient is the ________ of two regression
coefficients:
(a) Geometric mean

(b) Arithmetic mean
(c) Harmonic mean
(d) Median
32. When two regression coefficients bear same algebraic signs,

then correlation coefficient is:
(a) Positive
(b) Negative
(c) According to two signs
(d) Zero
33. It is possible that two regression coefficients have:
(a) Opposite signs

(b) Same signs
(c) No sign
(d) Difficult to tell
34. Regression coefficient is independent of:
(a) Units of measurement

(b) Scale and origin
(c) Both (a) and (b)
(d) None of them
35. In the regression line Y = a+ bX:
(a) ∑X = ∑ X̅
(b) ∑Y = ∑ ȳ
(c) ∑X = ∑Y
(d) X=Y
36. In the regression line Y = a + bX, the following is always true:
(a) ∑(X - X̅) = 0

(b) ∑(Y - ȳ) = 0
(c) ∑(X - X̅) = ∑(Y - ȳ)
(d) ∑(Y - ȳ)2 = 0
37. The purpose of simple linear regression analysis is to:
(a) Predict one variable from another variable

(b) Replace points on a scatter diagram by a straight-line
(c) Measure the degree to which two variables are linearly
associated
(d) Obtain the expected value of the independent random variable
for a given value of the dependent variable
38. The sum of the difference between the actual values of Y and its
values obtained from the fitted regression line is always:
(a) Zero
(b) Positive
(c) Negative
(d) Minimum
39. If all the actual and estimated values of Y are same on the
regression line, the sum of squares of error will be:
(a) Zero
(b) Minimum
(c) Maximum
(d) Unknown
40. ei = yi - ȳ i is called as
(a) Residual
(b) Difference between independent and dependent variables
(c) Difference between slope and intercept
(d) Sum of residual
41. A measure of the strength of the linear relationship that exists

between two variables is called:
(a) Slope
(b) Intercept
(c) Correlation coefficient
(d) Regression equation
42. When the ratio of variations in the related variables is constant,

it is called:
(a) Linear correlation

(b) Nonlinear correlation
(c) Positive correlation
(d) Negative correlation
43. If both variables X and Y increase or decrease simultaneously,

then the coefficient of correlation will be:
(a) Positive
(b) Negative
(c) Zero
(d) One
44. If the points on the scatter diagram indicate that as one variable
increases the other variable tends to decrease the value of r will be:
(a) Perfect positive

(b) Perfect negative
(c) Negative
(d) Zero
45. If the points on the scatter diagram show no tendency either to

increase together or decrease together the value of r will be close
to:
(a) -1
(b) +1
(c) 0.5
(d) 0
46. If one item is fixed and unchangeable and the other item varies,
the correlation coefficient will be:
(a) Positive
(b) Negative
(c) Zero
(d) Undecided
47. In scatter diagram, if most of the points lie in the first and third
quadrants, then coefficient of correlation is:
(a) Negative
(b) Positive
(c) Zero
(d) All of the above
48. If the two series move in reverse directions and the variations in
their values are always proportionate, it is said to be:
(a) Negative correlation

(b) Positive correlation
(c) Perfect negative correlation
(d) Perfect positive correlation
49. If both the series move in the same direction and the variations
are in a fixed proportion, correlation between them is said to be:
(a) Perfect correlation

(b) Linear correlation
(c) Nonlinear correlation
(d) Perfect positive correlation
50. The value of the coefficient of correlation r lies between:
(a) 0 and 1
(b) -1 and 0
(c) -1 and +1
(d) -0.5 and +0.5
Answer Key
1. B
2. B
3. A
4. A
5. C
6. A
7. D
8. B
9. C
10. D
11. C
12. B
13. A
14. A
15. B
16. C
17. C
18. B
19. D
20. A
21. B
22. B
23. B
24. C
25. A
26. A
27. A
28. B
29. A
30. B
31. A
32. C
33. B
34. C
35. B
36. B
37. A
38. A
39. A
40. A
41. C
42. A
43. A
44. C
45. D
46. C
47. B
48. C
49. D
50. C

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FY BBA Business Statistics - Unit 4.

Correlation and Regression

1. A process by which we estimate the value of dependent variable

2. The method of least squares dictates that we choose a

3. A relationship where the flow of the data points is best

(a) Linear relationship

(a) Linear relationship

6. The predicted rate of response of the dependent variable to

7. The slope of the regression line of Y on X is also called the:

(a) Correlation coefficient of X on Y

9. In simple regression equation, the numbers of variables involved

10. If the value of any regression coefficient is zero, then two

14. If regression line of = 5, then value of regression coefficient of Y

15. If Y = 2 - 0.2X, then the value of Y intercept is equal to:

(a) More than one

(a) Correlation problem

18. The dependent variable is also called:

19. The dependent variable is also called:

(a) Regressand variable

20. The independent variable is also called:

(a) Independent variable

22. In the regression equation X = a + bY, the X is called:

(a) Independent variable

23. In the regression equation Y = a +bX, a is called:

24. The regression equation always passes through:

25. The independent variable in a regression line is:

(a) Non-random variable

(a) Scatter diagram

27. The upward graph represents the relationship that is:

28. The downward graph represents the relationship that is:

(a) Linear positive

29. When regression line passes through the origin, then:

(a) Intercept is zero

30. When bXY is positive, then bYX will be:

(a) Geometric mean

32. When two regression coefficients bear same algebraic signs,

33. It is possible that two regression coefficients have:

(a) Opposite signs

34. Regression coefficient is independent of:

(a) Units of measurement

35. In the regression line Y = a+ bX:

(a) ∑(X - X̅) = 0

37. The purpose of simple linear regression analysis is to:

(a) Predict one variable from another variable

41. A measure of the strength of the linear relationship that exists

42. When the ratio of variations in the related variables is constant,

(a) Linear correlation

43. If both variables X and Y increase or decrease simultaneously,

(a) Perfect positive

45. If the points on the scatter diagram show no tendency either to

(a) Negative correlation

(a) Perfect correlation

50. The value of the coefficient of correlation r lies between:

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