A correlation coefficient of between Savings and Investment implies that
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1 mark, −0.333333333333333StatisticsJoint distributions, covariance and correlationThe correlation coefficientModerateabout 3 min
DSE 2015 Question 11: Joint distributions, covariance and correlation
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A correlation coefficient of 0.2 between Savings and Investment implies that (A) a unit change in Income leads to a less than 20 percent increase in Savings (B) a unit change in Income leads to a 20 percent increase in Savings (C) a unit change in Income may cause Savings to increase by less than or more than 20 (D) if we plot Savings against Income, the points would lie more or less on a straight line
Joint distributions, covariance and correlation has come up 61 times in 7 exams since 2005.
What this question tests
This question is on The correlation coefficient, part of Joint distributions, covariance and correlation in Statistics.
The standardised measure of linear association and what it can and cannot show.
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