BUSINESS STATISTICS – CA CMA FOUNDATION S.

SHEKHAR

CORRELATION AND REGRESSION

MULTIPLE CHOICE QUESTIONS
PRACTICE SET

1. Correlation analysis aims at

(a) Predicting one variable for a given value of the other variable
(b) Establishing relation between two variables
(c) Measuring the extent of relation between two variables
(d) Both (b) and (c).

2. Regression analysis is concerned with

(a) Establishing a mathematical relationship between two variables
(b) Measuring the extent of association between two variables
(c) Predicting the value of the dependent variable for a given value of the
independent variable
(d) Both (a) and (c).

3. If the plotted points in a scatter diagram lie from upper left to lower right, then the
correlation is
(a) Positive (b) Zero (c) Negative (d) None of these

4. If the plotted points in a scatter diagram are evenly distributed, then the correlation
is
(a) Zero (b) Negative (c) Positive (d) (a) or (b).

5. The correlation between shoe-size and intelligence is

(a) Zero (b) Positive (c) Negative (d) None of these.

6. Pearson’s correlation coefficient is used for finding

(a) Correlation for any type of relation
(b) Correlation for linear relation only
(c) Correlation for curvilinear relation only
(d) Both (b) and (c).

7. If the value of correlation coefficient is positive, then the points in a scatter diagram
tend to cluster
(a) From lower left corner to upper right corner
(b) From lower left corner to lower right corner

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(c) From lower right corner to upper left corner

(d) From lower right corner to upper right corner.

8. When r = 1, all the points in a scatter diagram would lie

(a) On a straight line directed from lower left to upper right
(b) On a straight line directed from upper left to lower right
(c) On a straight line
(d) Both (a) and (b).

9. Product moment correlation coefficient may be defined as the ratio of

(a) The product of standard deviations of the two variables to the covariance
between them
(b) The covariance between the variables to the product of the variances of them
(c) The covariance between the variables to the product of their standard deviations
(d) Either (b) or (c).

10. What are the limits of the correlation coefficient?

(a) No limit
(b) –1 and 1, excluding the limits
(c) 0 and 1, including the limits
(d) –1 and 1, including the limits

11. For finding the degree of agreement about beauty between two Judges in a Beauty
Contest, we use
(a) Scatter diagram (b) Coefficient of rank correlation
(c) Coefficient of correlation (d) Coefficient of concurrent deviation.

12. What are the limits of the coefficient of concurrent deviations?

(a) No limit
(b) Between –1 and 0, including the limiting values
(c) Between 0 and 1, including the limiting values
(d) Between –1 and 1, the limiting values inclusive

13. The method applied for deriving the regression equations is known as
(a) Least squares
(b) Concurrent deviation
(c) Product moment
(d) Normal equation.

14. The two lines of regression become identical when

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(a) r = 1 (b) r = –1
(c) r = 0 (d) (a) or (b).

15. The regression coefficients remain unchanged due to a

(a) Shift of origin (b) Shift of scale
(c) Both (a) and (b) (d) (a) or (b).

16. If the coefficient of correlation between two variables is –0.9, then the coefficient of
determination is
(a) 0.9 (b) 0.81 (c) 0.1 (d) 0.19.

17. If the coefficient of correlation between two variables is 0.7 then the percentage of
variation unaccounted for is
(a) 70% (b) 30% (c) 51% (d) 49%

18. If for two variable x and y, the covariance, variance of x and variance of y are 40, 16
and 256 respectively, what is the value of the correlation coefficient?
(a) 0.01 (b) 0.625 (c) 0.4 (d) 0.5

19. If r = 0.6 then the coefficient of non-determination is

(a) 0.4 (b) –0.6 (c) 0.36 (d) 0.64

20. If u + 5x = 6 and 3y – 7v = 20 and the correlation coefficient between x and y is 0.58

then what would be the correlation coefficient between u and v?
(a) 0.58 (b) –0.58 (c) –0.84 (d) 0.84

21. If the sum of squares of difference of ranks, given by two judges A and B, of 8
students is 21, what is the value of rank correlation coefficient?
(a) 0.7 (b) 0.65 (c) 0.75 (d) 0.8

22. If the rank correlation coefficient between marks in management and mathematics
for a group of student is 0.6 and the sum of squares of the differences in ranks is 66,
what is the number of students in the group?
(a) 10 (b) 9 (c) 8 (d) 11

23. The coefficient of concurrent deviation for p pairs of observations was found to be
. If the number of concurrent deviations was found to be 6, then the value of p is.
√
(a) 10 (b) 9 (c) 8 (d) none of these.

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24. If the regression line of y on x and of x on y are given by 2x + 3y = –1 and 5x + 6y =

–1 then the arithmetic means of x and y are given by
(a) (1, –1) (b) (–1, 1) (c) (–1, –1) (d) (2, 3)

25. Given the following equations: 2x – 3y = 10 and 3x + 4y = 15, which one is the
regression equation of x on y ?
(a) 1st equation (b) 2nd equation
(c) both the equations (d) none of these

26. If 4y – 5x = 15 is the regression line of y on x and the coefficient of correlation

between x and y is 0.75, what is the value of the regression coefficient of x on y?
(a) 0.45 (b) 0.9375 (c) 0.6 (d) none of these

27. If y = 3x + 4 is the regression line of y on x and the arithmetic mean of x is –1, what
is the arithmetic mean of y?
(a) 1 (b) –1 (c) 7 (d) none of these

28. If x and y satisfy the relationship y = –5 + 7x, the value of r is

(a) 0 (b) – 1 (c) + 1 (d) none

29. bxy is called regression coefficient of

(a) x on y (b) y on x (c) both (d) none

30. Two regression lines coincide when

(a) r = 0 (b) r = 2 (c) r = + 1 (d) none

31. The correlation is said to be positive

(a) When the values of two variables move in the same direction.
(b) When the values of two variables move in the opposite direction.
(c) When the values of two variable would not change.
(d) None of these.

32. If the coefficient of correlation between two variables is 0.7, then the percentage of
variation unaccounted for is
(a) 70% (b) 30% (c) 51% (d) 49%

33. What is spurious correlation?

(a) It is a bad relation between two variables.
(b) It is very low correlation between two variables.
(c) It is the correlation between two variables having no causal relation.

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(d) It is a negative correlation

34. If r = 0.6 then the coefficient of non-determination is

(a) 0.4 (b) –0.6 (c) 0.36 (d) 0.64

35. If the sum of squares of difference of ranks, given by two judges A and B, of 8
students in 21, what is the value of rank correlation coefficient?
(a) 0.7 (b) 0.65 (c) 0.75 (d) 0.8

36. For a 4 x 7 classification of bivariate data, the maximum number of conditional

distributions is :
(a) 11 (b) 28 (c) 35 (d) None

37. There are two equations: m + 3p = 2 and 6n + 2q = 1. Correlation coefficients for p

and q is 0.5. Find the correlation coefficients of m and n
(a) 0.6 (b) 0.5 (c) -0.5 (d) None of these

38. If 4y - 5x = 15 is the regression line of y on x and the coefficient of correlation

between x and y is 0.75, what is the value of the regression coefficient of x on y ?
(a) 0.45 (b) 0.9375 (c) 0.6 (d) none of these

39. If the regression line of y on x and of x on y are given by 2x+ 3y = -1 and 5x + 6y = -

1 then the arithmetic means of x and y are given by.
(a) (1,-1) (b) (-1,1) (c) (-1, -1) (d) (2,3)

40. For a positive and perfectly correlated random varaiables , one of the regression
coefficeint is 1.3 and the standard devation of X is 2, the variance of Y is
(a) 2.37 (b) 6.76 (c) 6.56 (d) 3.16

41. If the two regression coefficients are byx = - 0.4 and bxy = - 0.9 then the value of
correlation coefficient (r) is
(A) 0.6 (B) 0.65 (C) - 0.6 (D) - 0.65

42. If two regression equations x + 5y = 13 and 3x – 2y = 5, then the mean values of x

and y are respectively.
(A) (2, 3) (B) (3, 2) (C) (4, 5) (D) (5, 4)

43. The correlation coefficient between two variables x and y is

(A) sum of two regression coefficients.
(B) Arithmetic Mean of two regression coefficients.

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(C) Harmonic Mean of two regression coefficients.

(D) Geometric Mean of two regression coefficients

44. If 𝝈𝒚 = 𝟒, byx = 0.48, r = 0.6, then is 𝝈𝒙

(A) 5 (B) 7 (C) 9 (D) 6.5

45. The regression equation of y on x is 3x – 5y = - 12 and regression equation of x on y

is 2x – y = 7. The value of y when x = 10 is
(A) 8.4 (B) 6.5 (C) 7 (D) 9

46. When Var (x) = 2.25, Var (y) = 1 and Cov (x, y) = 0.9, then correlation coefficient is
(A) 0.45 (B) 0.8 (C) 0.6 (D) 0.75

Consider the following set of distribution and answer Q.no. 47 to 50

X 1 2 3
Y 3 4 1

47. Find coefficient of correlation

48. Find a line of best fit of X on Y
49. Find regression coefficient byx
50. Find concurrent deviation.

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