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CA Foundation P3 · Chapter 17 · Question 2 of 9

If Cov(x, y) = 18, σx = 4 and σy = 6, the coefficient of correlation is:

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Reveal answer & explanation

Correct answer: D) 0.75

Explanation

r = Cov(x, y)/(σx σy) = 18/(4 x 6) = 18/24 = 0.75. Inverting the ratio gives 1.33, which is impossible since |r| cannot exceed 1.

All 9 questions in Chapter 17Correlation and Regression MCQs with answers

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