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Forecasting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Forecasting

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • September 27, 2021 at 9:59 am #636575
    Nguyen
    Participant
    • Topics: 14
    • Replies: 13
    • ☆

    Hi John. Could you please help me with the question 4a.5 in MA Kit?

    Using data from twelve European countries, it has been calculated that the correlation between the level of car ownership and the number of road deaths is 0.73.

    So, why the option “High levels of car ownership cause high levels of road deaths” is wrong?

    Thank you so much in advance.

    September 27, 2021 at 5:34 pm #636608
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    A high degree of correlation means that the two things move fairly well together, but never proves that one causes the other.

    For example, suppose there is a high correlation between the amount of alcohol people drink and the number of heart attacks. That might mean that alcohol causes heart attacks, but it might simply be that people who drink a lot of alcohol also eat lots of fried food and that it is the fried food that causes the heart attacks and not the alcohol.

    (That is one of the dangers in real life – that people quote statistics saying that they are proof of something when they do not actually prove it 🙂 )

    September 28, 2021 at 12:29 pm #636637
    Nguyen
    Participant
    • Topics: 14
    • Replies: 13
    • ☆

    Thank you so much John.

    September 28, 2021 at 3:17 pm #636645
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    You are welcome 🙂

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

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