Chapter No.

10 Correlation and Regression

Q.1 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
Q.2 Find out the regression coefficient of y on x, if regression coefficient of x on y is 0.25 and
the coefficient of correlation between x and y is 0.6.
(a) 0.78 (b) 1.44
(c) 1.83 (d) None of these
Q.3 Which of the following statement/s about scatter diagram is/are correct?
(i) It is least important to establish which variable is independent
(ii) It might indicate a relationship where there is none.
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.4 Which of the following statement/s about scatter diagram is/are correct?
(i) It leads to correct conclusion even if there are only few data points.
(ii) It might indicate a relationship where there is none.
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.5 Which of the following statement/s about scatter diagram is/are correct?
(i) It is least important to establish which variable is independent
(ii) It leads to correct conclusion even if there are only few data points.
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.6 Which of the following statement/s about scatter diagram is/are correct?
(i) Shows visual relation between variables.
(ii) It might indicate a relationship where there is none.
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.7 Which of the following statement/s as regards to the value of the correlation coefficient
is/are correct?
(i) It is always greater than 0
(ii) It is always lies in the range -1 to +1
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct

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Q.8 Which of the following statement/s about scatter diagram is/are correct?
(i) It leads to more accurate results if the collected data is a typical data.
(ii) It might indicate a relationship where there is none
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.9 Which of the following statement/s is/are correct?
(i) The coefficient of determination is the square of the correlation coefficient
(ii) The value of the coefficient of determination must always be in the range 0 to +1.
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.10 Which of the following statements about scatter diagram is/are correct?
(i) It leads to more accurate results if the collected data is a typical
(ii) We can draw it for two or more variables
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.11 Which of the following statement/s is/are correct?
(i) There is strong relationship between two variables; the points on the scatter
diagram would be concentrated around a curve.
(ii) Linear regression analysis can be used to estimate fixed cost and variable cost per
unit from historical total cost and production data.
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.12 Which of the following statement/s is/are correct where Regression is used?
(i) It is very important in accounting and other business operations
(ii) It is widely used in economics & business
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.13 Which of the following statement/s is/are correct where Regression is used?
(i) It tells fixed cost but not variable cost per unit.
(ii) It shows the extent of relationship between two variables
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct

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Q.14 Which of the following statement/s is/are correct about correlation coefficient?
(i) It is always from 0 to +1
(ii) It is always from 0 to -1
(a) Both statements are correct (b) Both statements are not correct
(c) Only statement (i) is correct (d) Only statement (ii) is correct
Q.15 Find the relationship between two variables

(a) Strong/perfect positive correlation (b) Moderate positive correlation

(c) Weak position correlation (d) No correlation
Q.16 Find the relationship between two variables.

(a) Strong / perfect positive correlation (b) Moderate positive correlation

(c) Weak positive correction (d) No correlation
Q.17 Find the relationship between two variables

(a) Strong/perfect positive correlation (b) Moderate positive correlation

(c) Weak positive correlation (d) No correlation

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Q.18 Find the relationship between two variables

(a) Strong/perfect positive correlation (b) Moderate positive correlation

(c) Weak positive correlation (d) No correlation
Q.19 Range of coefficient of correlation is?
(a) - ∞ to +1 (b) -1 to +1
(c) 0 to +1 (d) -1 to +∞
Q.20 2y + 3x + 24 = 0; find x intercept?
(a) 12 (b) -8
(c) 8 (d) -12
Q.21 Which of the following is incorrect about Co efficient of determination?
(a) Range from 0 to +1
(b) Square of “r”
(c) Range from 0 to -1
(d) Explain the variation in dependent variable due to independent
Q.22 n = 10, ∑x = 120, ∑y = 150, ∑x2 = 1200, ∑xy = 900. Find regression coefficient y on x.
(a) 3.01 (b) 3.75
(c) 2.75 (d) 1.75
Q.23 Regression line is y = 32 + 0.5x; one unit increase in x would affect what and how much?
(a) 1 unit increase in x causes 0.5 unit increase in y
(b) 1 unit increase in y causes 0.5 unit increase in x
(c) 1 unit increase in x causes 1 nit increase in y
(d) 1 unit increase in x causes 1 unit increase y
Q.24 Range of co efficient determination is?
(a) -∞ to +1 (b) 0 to +1
(c) -1 to +∞ (d) None of these

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Q.25 Which of the following correct about scatter diagram?

(a) Perfect correlation (if all the points lie on the line of regression)
(b) Perfect –ve correlation (if all the points lie on the line of regression sloping
downward)
(c) +ve correlation (if scatter diagram shows increasing trend on right side)
(d) All of these
Q.26 Properties of scatter diagram
(a) Graphical representation of relation b/w independent and dependent variables
(b) It is only used to 2 variables
(c) Independent variable is usually x, dependent variable is usually y
(d) All of these
Q.27 Which of the following statements is/are correct as regards to scatter diagram? (Any Two)
(a) It is least important to establish which variable is independent before plotting the
scatter diagram
(b) It cannot lead to correct conclusions if there are only few data points.
(c) It can show relationship between more than two variables.
(d) It may indicate a relationship where there is none
Q.28 Increase trend on scattered diagram.
(a) Option negative (b) Option positive
(c) Option random (d) None of these
Q.29 If all points lie on (scatter line) least square regression line, then error will be
(a) 0 (b) 1
(c) Maximum (d) Minimum
Q.30 Characteristics of regression line?
(a) Predict/estimate dependent variable when independent variable is given
(b) Define relationship between dependent and independent variable
(c) Both a & b (d) None of these
Q.31 The unknown value of dependent variable can be estimated on the basis of given value of
independent variable by using.
(a) Scatter diagram (b) Least square regression line
(c) Both a and b (d) None of these

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Q.32 Find the relationship between two variables

(a) Strong/perfect positive correlation (b) Moderate positive correlation

(c) Weak position correlation (d) No correlation
Q.33 If co-efficient of determination is positive then co-efficient of correlation could be:
(a) Positive (b) Negative
(c) Might be any (d) None of these
2
Q.34 If r = 0.56, bxy = 2, find byx?
(a) 0.18 (b) 0.38
(c) 0.28 (d) 0.48
2
Q.35 If r = 0.25 then what is its meaning?
(a) It means correlation is 25% (b) It means correlation is 75%
(c) It means correlation is 50% (d) None of these
2
Q.36 For r = 0.64 the explained variation in dependent variable due to independent variable is:
(a) 0.36 (b) 0.64
(c) 0.774 (d) None of these
Q.37 If r = 0.8 (y on x) means that
(a) 36% variation in y due to x (b) 36% variation in x due to y
(c) 64% variation in x due to y (d) 64% variation in y due to x
Q.38 There is 25% deviation (variation) in y due to x. coefficient of correlation is?
(a) +0.5 (b) -0.5
(c) Both a & b (d) None of these
2
Q.39 If value of r for a particular situation is 0.36. What is the coefficient of correlation?
(a) +0.6 (b) -0.6
(c) 0.06 (d) +0.6 or – 0.6
Q.40 If the co-efficient of determination is equal to 1, then correlation Co-efficient is
(a) Must be equal to one (b) Either -1 or +1
(c) Any value between -1 and +1 (d) Must be -1

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Q.41 If r = 0.9, line y on x

(a) 90% variation in y w.r.t.x (b) 81% variation in y w.r.t.x
(c) 19% variation in y w.r.t.x (d) 10% variation in x w.r.t.x
Q.42 Find the coefficient of correlation between x and y if
Regression line of x on y is: 5x – 4y + 2 = 0
Regression line of y on x is: x – 5y + 3 = 0
(a) 0.2 (b) 0.3
(c) 0.4 (d) 0.5
Q.43 What is the primary purpose of the "line of best fit" in linear regression?
(A) To connect all the data points in a scatter plot.
(B) To summarize the overall trend in the data and make predictions.
(C) To force the data to fit a straight line.
(D) To minimize the correlation between variables.
Q.44 Correlation b/w Car (weight & reliability) is r = -0.30
Correlation b/w Car (weight & maintenance cost) r = + 0.7
(a) Heavier cars tend to be less reliable
(b) Heavier cars tend to cost more maintain
(c) Car weight is related more strongly to reliability than to maintenance cost
(d) Both (a) and (b)
Q.45 Correlation b/w Car weight & reliability r = 0.30
Correlation b/w Car weight &maintenance cost r = 0.7
Which of the following statements are true?
(a) Heavier cars tend to be less reliable
(b) Heavier cars tend to cost more to maintain
(c) Car weight is related more strongly to reliability than to maintenance cost
(d) Both (and (b)
Q.46 In regression, the sum of the residuals is always:
(a) 0 (b) >0
(c) <0 (d) All of these
Q.47 Regression lines pass through the …………..
(a) ∑x, ∑y (b) ̅ ̅
(c) ∑(Y – Y) (d) None of these
Q.48 If r range from +0.9 to +1.00 then which of the following is correct
(a) There is strong correlation (b) There is high correlation
(c) There is perfect correlation (d) All of these

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Q.49 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
Q.50 When bXY is positive, then byx will be:
(a) Negative (b) Positive
(c) Zero (d) One
Q.51 Co efficient of determination
(a) Range from -1 to +1 (b) Square of “r”
(c) Range 0 to 1 (d) Both b & c

Q.52 The members of the selection committee rank eight players for selection as follows: rank
correlation of the following data?
Player A B C D E F G H
Rank (member 1) 1 2 3 4 5 6 7 8
Rank (member 2) 2 1 5 7 3 6 4 8
The coefficient of rank correlation is:
(a) 0.67 (b) 0.73
(c) 0.47 (d) 0.37
Q.53 bxy = -0.41 byx = -0.71, r = ?
(a) 0.54 (b) -0.54
(c) 0.35 (d) Not possible
Q.54 All data points falling along a straight line is called:
(a) Linear relationship (b) Non-linear relationship
(c) Residual (d) Scatter diagram
Q.55 Which of the following statement is correct?
(a) The value of coefficient of determination is in the range -1 to +1
(b) The value of coefficient of determination shows how much variation in the value
of y is explained by variation in the value of x
(c) If the coefficient of correlation is, r = 0, its mean there is a perfect correlation
between x and y
(d) Both a and b
Q.56 There is a perfect positive correlation when:
(a) All the data points lie on a scatter diagram in a discrete form
(b) All the data points lie in an exact straight line and a linear relationship exists
between the two variables

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(c) All the data points lie in an exact straight line but relationship, may or may not be
linear
(d) None of the above
Q.57 Find the coefficient of correlation between x and y if:
Regression line of x on y is: 5x – 4y + 2 = 0
Regression line of y on x is: x – 5y + 3 = 0
(a) 0.4 (b) -0.4
(c) 40% (d) +0.16
Q.58 A medical research company has developed the following equation for regression line of
y on x (line of best fit) for a particular age group y = 6.93 + 0.38x where x represent
height in centimeters and y represents weight in kilogram. Using above equation, we can
say that
(a) For each centimeter increase in height, weight will decrease by 0.38 kilogram
(b) For each centimeter increase in height, weight will increase by 0.38 kilogram
(c) For each centimeter increase in height, weight will increase by 6.55 kilogram
(d) For each centimeter increase in height, weight will decrease by 6.55 kilogram
Q.59 If a = -12.57 and b = 0.35 then equation for regression line of y on x (line of best fit)
would be:
(a) Y = -0.35 + 12.57x (b) Y = 0.35 – 12.57x
(c) Y = 12.57 – 0.35x (d) Y = -12.57 + 0.35x
Q.60 If 25% of variations in the value of y are explained by variations in the value of x then
coefficient of correlation is:
(a) 0.25 (b) 0.75
(c) 0.50 or -0.50 (d) Either 0.25 or -0.25
Q.61 The following data pertains to a group of football players:
Heights (inches) 72 66 71 68 75
Weight (kg) 95 80 83 75 92
Equation of a line of best fit for the above data will be:
(a) Y = 1.89 – 48.06x (b) Y = 1.89 + 48.06x
(c) Y = -48.07 + 1.89x (d) Y = 48.06 – 1.89x
Q.62 Which of the following statement is correct?
(a) If there is a strong relationship between two variables, the point on the scatter
diagram would be concentrated around a curve.
(b) Linear regression analysis is used to calculate values of „a‟ and „b‟ in the linear
cost equation.
(c) The standard regression equation is: y = a + bx
(d) All of these

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Q.63 Value of r = 0, indicates:

(a) Perfect positive correlation (b) Perfect negative correlation
(c) No correlation (d) None of the above
Q.64 Correlation between shoe and fan is ………..
(a) 1 (b) Positive
(c) 0 (d) Negative
Q.65 The process which selects that particular line for which the sum of the squares of the
vertical distances from the observed points to the line is as small as possible is called:
(a) Sum of squares method (b) Sum of squares of errors method
(c) Least square method (d) None of these
Q.66 If co-efficient of determination is positive then co-efficient of correlation could be?
(a) Positive (b) Negative
(c) Any (d) Cannot be determined
Q.67 The mathematical values of regression co-efficient must be:
(a) Both positive (b) Both negative
(c) Both positive or both negative (d) None of these
Q.68 If the coefficient of correlation between two variables is 0.8 then the percentage of
variations in dependent variable not accounted for by the analysis is
(a) 64% (b) 36%
(c) 80% (d) 20%
Q.69 The dependent variable is also called:
(a) The explained variable (b) Unexplained variable
(c) The explanatory variable (d) None of these
Q.70 The explained variable or response is also called:
(a) The independent variable (b) The dependent variable
(c) Non-random variable (d) None of these
Q.71 The predictor or unexplained variable is also called:
(a) The independent variable (b) he dependent variable
(c) Random variable (d) None of these
Q.72 In regression analysis, b = 2.8, indicates that the value of dependent variable:
(a) Increases by 2.8 units at per unit increase in independent variable
(b) Decreases by 2.8 units at per unit increase in independent variable
(c) Increases by 2.8 units at per unit decrease in independent variable
(d) None of these

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Q.73 If Y is the observed value and ̅is the estimated value (estimated by using the regression
line) then Σ( − ̅ ):
(a) Should be zero
(b) Is likely to be close to zero
(c) In majority of the cases would be equal to zero
(d) None of these
Q.74 If two variables tend to vary simultaneously in same direction, they are said to be:
(a) Dependent (b) Independent
(c) Correlated (d) None of these
Q.75 If r = 0.9 and 5 is subtracted from each observation of x, then r will:
(a) Decrease by 5 units (b) Decreases by less than 5 units
(c) Remain unchanged (d) None of these
Q.76 If r = 0.9 and if 10 is added to each observation of x, then r will:
(a) Increase by 10 units (b) Increase by more than 10 units
(c) Remain unchanged (d) one of these
Q.77 If r = 0.9 and if 7 is subtracted from each observation of Y, then r will:
(a) Decrease by 7 units (b) Decrease by less than 7 units
(c) Remain unchanged (d) None of these
Q.78 If 𝑏𝑥𝑦 = 0.78 and 𝑏𝑦𝑥 = -0.45, then r is equal to:
(a) +0.351 (b) -0.351
(c) Cannot be determined (d) None of these
Q.79 If 𝑏𝑥𝑦 = -0.78 and 𝑏𝑦𝑥 = 0.45, then r is equal to:
(a) +0.351 (b) -0.351
(c) Cannot be determined (d) None of these
Q.80 If 𝑏𝑥𝑦 = +1.93 and 𝑏𝑦𝑥 = 0.6, then r is equal to:
(a) 1.158 (b) 1.0761
(c) Data is fictitious (d) None of these
Q.81 Select one or more of the possible correct statement/s:
1. Correlation may be direct or positive.
2. Correlation must be direct or positive.
3. Correlation may be inverse or negative.
4. Correlation coefficient ranges from 0 to 1

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Q.82 Select one or more of the possible correct statement/s:

1. A positive relationship between two variables means that higher values of one
variable are paired with higher values of the other.
2. Correlation coefficient is not expressed in the units of measurement from which it
is obtained.
3. Regression coefficient ranges between -2 and +1
4. Regression coefficient cannot be 1
Q.83 Select one or more of the possible correct statement/s:
1. Coefficient of determination is obtained by squaring the regression coefficient.
2. Coefficient of determination is obtained by squaring the coefficient of correlation.
3. Coefficient of determination can be negative.
4. Coefficient of determination cannot be negative.

Q.84 From its past experience Tesla has observed that it is able to achieve sales revenue of
around Rs. 500,000 in years when there is no marketing expenditure and also that the
sales revenue increases by around Rs. 150,000 for every Rs. 75,000 spending on
marketing expenditure. Identify the best possible equation for Tesla linking sales and
marketing expenditure from the data provided
(a) Sales = 500,000 + 75,000 × marketing expenditure
(b) Marketing expenditure = 500,000 + 2 × Sales
(c) Sales = 2 × marketing expenditure
(d) Sales = 500,000 + 2 × marketing expenditure

Q.85 Identify the limitation(s) of a scatter diagram:

1. Useful aid to give a visual impression of the relationship between variables.
2. Might indicate a relationship where there is none.
3. Might lead to incorrect conclusions if there are only few data points available or
the data collected is a typical for some reason.
Q.86 In the regression equation Y = a +bX, “a” is called:
(a) X-intercept (b) Y-intercept
(c) Dependent variable (d) None of these
Q.87 The data on the following table gives the market share of a product and television
advertising expenditure:
Advertising expenditure(X) 15 17 13 14 16
Market share (Y) 23 25 21 24 26

Estimate market share (Y) when advertising expenditure is Rs. 20

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(a) 28 (b) 28.80

(c) 26.50 (d) 25.60
Q.88 If rank correlation co-efficient is 2/3 and of squares of difference of all rank is 28. Find
number of pairs of observation.
(a) 7 (b) 8
(c) 10 (d) 9
Q.89 Correlation analysis is used to:
1. Predict one variable for a given value of other variable.
2. Establish relationship between two variables
3. Measure the extent of relationship between two variables
4. Both (1) and (2)
Q.90 The dependent variable is also called:
(a) Regressand (b) Predicted variable
(c) Explained variable (d) All of these
Q.91 The independent variable is also called:
(a) Regressor (b) Predictor
(c) Regression variable (d) Explanatory variables
(e) All of these
Q.92 While computing rank correlation coefficient between profits and investment for 10 years
of a firm, the difference in rank for a year was taken as 7 instead of 5 by mistake and the
value of rank correlation coefficient was computed as 0.80. What would be the correct
value of rank correlation coefficient after rectifying the mistake?
(a) 0.80 (b) 0.85
(c) 0.915 (d) 0.75

Q.93 Following are the details about Tee Limited‟s monthly production and total cost:

Month Units Cost

June 80 950,000
July 90 1,000,000
August 95 1,040,000

Using the line of best fit, calculate estimated fixed cost

(a) 479,285.7 (b) 489,285.7
(c) 389,285.7 (d) 379,285.7

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Q.94 Identify correct statement

(a) A positive value of correlation coefficient indicates negative association
(b) A negative value of correlation coefficient indicates negative association
(c) A negative value of correlation coefficient indicates positive association
(d) No association is indicated by a negative value of correlation coefficient

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