Yes it is – 0.85 squared is equal to 0.72 (or 72%).

And, as I explain in my free lectures, the coefficient of determination is a measure of how much of the variation in the dependent variable is ‘explained’ by the variation of the independent variable.

Did you watch my lectures before attempting the test? The lectures are a complete free course for Paper F2 (now Paper MA) and cover everything needed t one able to pass the exam well.

yes Sir l did watch all your lectures, its just that l am a bit confused because the question asked for the correlation coefficient not the correlation of determination.

No – the question did not ask for the coefficient of correlation. The question gave the coefficient of correlation but asked which of the statements was true. The only true statement was the description of the coefficient of determination (which is r^2)

For question 5 in this chapter 19 questions, we used the high-low method. on the question, the highest total cost is $75,000 (month 4). but the answer was calculated with $74,000 (month 1) as the highest total cost. Could you please help me look into it?

Thank you so much for your reply. I did watch the lecture but I misunderstood the calculation. It mixed me up when the highest level of production did not correspond to the highest cost. I thought we take the highest and lowest level of production and the highest and lowest cost. But I understood it now. 🙂

Hi sir, for question no. 5. By using the high low method, i thought the unit for highest cost is beside it. But, it turn out to be not and the highest unit is 3000 unit. do u get me ?

If you watch the free lectures (and you should watch the lectures before you attempt the tests) you will see that we take the highest and lowest independent variable, which in this case is the level of production. The cost depends on the level of production, and so the cost is the dependent variable and the level of production is the independent variable.

I have no idea which question you are asking about since you have posted this under a practice test for chapter 19 of our free lecture notes and lectures!!

hi sir…..in budgeting when they say compare actual against planned at the of the budgeting period which actual results will they be comparing with since they would have not yet started doing anything yet

Why are you asking this under a test on index numbers? You should ask in the Ask the Tutor Forum (although if you have watched my free lectures, your question is answered and explained in the lectures – it is variance analysis. We do not compare actual results with the original budgets, but with the flexed budgets. And the comparison is made at the end of the period to identify what went wrong during the period in order that they can try and correct any problems for the future.)

When using the additive model, the seasonal variations should add up to zero.

I think maybe you have not watched the free lecture on time series analysis – you should not be attempting the tests until you have watched the lecture 🙂

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mmandangu says

Dear Sir,

How come on question 3 the answer is 0.85 squared which is 72%, l thought r squared is the formula for correlation of determination?

John Moffat says

Yes it is – 0.85 squared is equal to 0.72 (or 72%).

And, as I explain in my free lectures, the coefficient of determination is a measure of how much of the variation in the dependent variable is ‘explained’ by the variation of the independent variable.

Did you watch my lectures before attempting the test? The lectures are a complete free course for Paper F2 (now Paper MA) and cover everything needed t one able to pass the exam well.

mmandangu says

yes Sir l did watch all your lectures, its just that l am a bit confused because the question asked for the correlation coefficient not the correlation of determination.

John Moffat says

No – the question did not ask for the coefficient of correlation. The question gave the coefficient of correlation but asked which of the statements was true. The only true statement was the description of the coefficient of determination (which is r^2)

mmandangu says

Oh, ok, now l understand. Thank you sir.

John Moffat says

You are welcome 🙂

kissme4560 says

Waawo I got it all

John Moffat says

Great 🙂

ragarcia says

Hello Sir,

For question 5 in this chapter 19 questions, we used the high-low method. on the question, the highest total cost is $75,000 (month 4). but the answer was calculated with $74,000 (month 1) as the highest total cost. Could you please help me look into it?

Many thanks.

John Moffat says

Have you watched the free lecture on this?

You do not use the highest and lowest cost – you use the highest and lowest levels of production.

ragarcia says

Dear Mr. Moffat,

Thank you so much for your reply. I did watch the lecture but I misunderstood the calculation. It mixed me up when the highest level of production did not correspond to the highest cost. I thought we take the highest and lowest level of production and the highest and lowest cost. But I understood it now. 🙂

Best regards,

Rigine

John Moffat says

You are welcome 🙂

fatinfyusuf says

Hi sir, for question no. 5. By using the high low method, i thought the unit for highest cost is beside it. But, it turn out to be not and the highest unit is 3000 unit. do u get me ?

John Moffat says

If you watch the free lectures (and you should watch the lectures before you attempt the tests) you will see that we take the highest and lowest independent variable, which in this case is the level of production. The cost depends on the level of production, and so the cost is the dependent variable and the level of production is the independent variable.

geokcheng says

Sir,

For qn no. 22. Can you explain how to get Npv at 12% &20%?

John Moffat says

I have no idea which question you are asking about since you have posted this under a practice test for chapter 19 of our free lecture notes and lectures!!

saad96 says

Hello sir ,

Can you please help me with Question no 5 ? Why the answer includes minus 7.6 ?

John Moffat says

You will know from the free lectures that the total of all four of seasonal variations should be 0.

The three that are given add up to plus 7.6, so to make all four add up to zero, the missing one must be minus 7.6.

kudzanai8 says

hi sir…..in budgeting when they say compare actual against planned at the of the budgeting period which actual results will they be comparing with since they would have not yet started doing anything yet

John Moffat says

Why are you asking this under a test on index numbers?

You should ask in the Ask the Tutor Forum (although if you have watched my free lectures, your question is answered and explained in the lectures – it is variance analysis. We do not compare actual results with the original budgets, but with the flexed budgets. And the comparison is made at the end of the period to identify what went wrong during the period in order that they can try and correct any problems for the future.)

Afrina says

Dear Sir,

I’m having problem with this question. Chapter 19, ques. # 4.

Kindly explain pls & need ur help with calculation of the correct answer.

John Moffat says

When using the additive model, the seasonal variations should add up to zero.

I think maybe you have not watched the free lecture on time series analysis – you should not be attempting the tests until you have watched the lecture 🙂