Deck 14: Correlation Techniques

Question 1

Correlation and regression are related statistical functions. Which option best describes this relationship?

A) Regression is a measure of how well correlation explains the relationship between two variables
B) The correlation coefficient always lies on the regression line
C) Correlation can indicate how well the regression line 'fits' the data
D) The regression line can be calculated using values for the mean and the correlation coefficient

Answer 1

Correlation can indicate how well the regression line 'fits' the data

Question 2

Data from established manufacturing companies in Morocco shows that the number of years' experience a sales person has is correlated with their average yearly sales. The correlation coefficient ( r) is 0.62. Calculate, to 1 decimal place, the percentage of variation in sales that is accounted for by experience.

A) 62.0%
B) 61.6%
C) 45.3%
D) 38.4%

Answer 2

38.4%

Question 3

Which of the following relationships would you expect to be negatively correlated?

A) Marketing budget and Sales revenue
B) Years of experience and Salary
C) Volume of raw materials purchased and Unit cost
D) Car speed and Stopping distance

Answer 3

Volume of raw materials purchased and Unit cost

Question 4

Which of the following options is not a valid value for the correlation coefficient?

A) -0.94
B) 0
C) 0.36
D) 1.2

Question 5

There is a positive correlation between two variables x and y. Which of the following statements is true?

A) As x increases, y will increase
B) As x increases, y will decrease
C) As x increases, y will remain unchanged
D) We cannot say what happens as x increases

Question 6

What term is used to describe differences in the value of an independent variable which are accounted for by the y on x regression line?

A) Correlated differences
B) Explained differences
C) Unexplained differences
D) Regression differences

Question 7

Which of the following statements is TRUE?

A) Causality normally implies correlation
B) Correlation normally implies causality
C) There is never a relationship between causality and correlation
D) Correlation only occurs when there is causality

Question 8

Which of the following options gives the best definition of correlation?

A) An estimate of strength of a relationship between two variables
B) An estimate of the spread of values in a set of data
C) An estimate of skewness in a set of data
D) An estimate of causality between two variables

Question 9

Which of the following statements about rank correlation is NOT true?

A) Rank correlation is sometimes used to approximate product moment correlation
B) If one variable is non-numeric the rank correlation is most appropriate
C) Rank correlation can be used if variables can be placed in order (e.g. of size)
D) Rank correlation is usually considered to be more accurate than product moment correlation

Question 10

The analysis of two variables indicates a correlation with r = -0.85. Calculate, to 1 decimal place, the percentage of variation in the independent variable that is not accounted for by the dependent variable.

A) 85.0%
B) 72.3%
C) 56.3%
D) 27.8%