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Correlation coefficient

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 8 years ago by AvatarJohn Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • March 30, 2018 at 6:33 am #444138
    Avatarmango1991
    Member
    • Topics: 11
    • Replies: 15
    • ☆

    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. -0.9

    Sir 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 #444148
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54836
    • ☆☆☆☆☆

    The 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 #444179
    Avatarmango1991
    Member
    • Topics: 11
    • Replies: 15
    • ☆

    I 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 #444205
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54836
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Correlation coefficient’ is closed to new replies.

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