Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Correlation coefficient
- This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
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- March 30, 2018 at 6:33 am #444138
Sir the doubt is –
Which of the following is NOT a feasible value for correlation coefficient.
A. +1.2
B. +0.6
C. 0
D. -0.9Sir the answer as per the book is A. But how can 1.2 not be a feasible correlation coefficient as the closer it is to 1 the better it is.
My answer was C. Zero.
Because if its zero then there is no correlation .
Can u please explain why it is +1.2 and why not the others ?March 30, 2018 at 8:02 am #444148The coefficient of correlation will always lie between -1 and + 1.
It is impossible for it to be below -1 and impossible for it to be above + 1
The question is not asking what is a ‘good’ value – it is asking what is a possible value. 0 is a possible value (even though it means there is no correlation).
I suggest that you watch my free lectures on this.
The lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.
March 30, 2018 at 11:18 am #444179I do watch your videos Sir. Thank you nevertheless for clarifying this doubt as they are bound to pop up every now and then 🙁
March 30, 2018 at 1:39 pm #444205You are welcome 🙂
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