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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Correlation Coefficient
Dear Sir,
Could you please have a look what am I doing incorecctly in the following example:
An ice-cream supplier has recorded some sales data which he believes show a relationship between temperature and sales. The results shown below are for 10 sample days in the summer.
?x = 210?y = 187?x2 = 4,634?y2 = 3,865?xy = 4,208
The correlation coefficient is nearest to:
Select one:
a.
0.84
b.
0.98
c.
0.92
d.
0.88
=((10*4208)-(210*187))/ ?((10*4634)-(210*210))*((10*3865)-(187*187)=
=(42,080-39,270)/?(46,340-44,100)*(38,650-34,969)=
=2,810/?(2,240*3,681)= 2,810/?8,245,440= 2,810/908= 3.09
I’ve checked it a few times.
There is no such an answer 🙁
Could you help, please?
The square root of 8,245,440 is 2,871 (and 908 as you have written).
Therefore the coefficient of correlation is 2,810/2,871 = 0.98
I think I forgot to put |”0″ in 8,245,440 and that’s why I got 908.
I’m getting 2,871 and then 0.98.
Thank you!
You are welcome 🙂
