Correlation and RegressionMCQMTP Nov 19Question 3729 of 188
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If the two regression coefficients are 4\displaystyle 4 and $0.16$, the percentage of unexplained variation is.

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option b — $36$

All Options:

  • A$64$
  • B$36$
  • C$54$
  • D$46$

Detailed Solution & Explanation

The regression coefficients are given as byx=4\displaystyle b_{yx} = 4 and bxy=0.16\displaystyle b_{xy} = 0.16.\n\n1. The coefficient of determination, r2\displaystyle r^2, is the product of the two regression coefficients and represents the explained variation:\nr2=byxtimesbxy=4times0.16=0.64r^2 = b_{yx} \×\displaystyle \times b_{xy} = 4 \×\displaystyle \times 0.16 = 0.64\nThis means that the explained variation is $64\\%.\n\n2.Theunexplainedvariationistheremainingportionofthevariationandisgivenby:\n<spanclass="katex−display"><spanclass="katex"><spanclass="katex−mathml"><mathxmlns="http://www.w3.org/1998/Math/MathML"display="block"><semantics><mrow><mspacelinebreak="newline"></mspace><mi>t</mi><mi>e</mi><mi>x</mi><mi>t</mi><mrow><mi>U</mi><mi>n</mi><mi>e</mi><mi>x</mi><mi>p</mi><mi>l</mi><mi>a</mi><mi>i</mi><mi>n</mi><mi>e</mi><mi>d</mi><mi>V</mi><mi>a</mi><mi>r</mi><mi>i</mi><mi>a</mi><mi>t</mi><mi>i</mi><mi>o</mi><mi>n</mi></mrow><mo>=</mo><mn>1</mn><mo>−</mo><msup><mi>r</mi><mn>2</mn></msup><mo>=</mo><mn>1</mn><mo>−</mo><mn>0.64</mn><mo>=</mo><mn>0.36</mn><mspacelinebreak="newline"></mspace><mi>t</mi><mi>e</mi><mi>x</mi><mi>t</mi><mrow><mi>o</mi><mi>r</mi></mrow><mn>36</mn><mspacelinebreak="newline"></mspace></mrow><annotationencoding="application/x−tex">textUnexplainedVariation=1−r2=1−0.64=0.36textor36\displaystyle .\n\n2. The unexplained variation is the remaining portion of the variation and is given by:\n<span class="katex-display"><span class="katex"><span class="katex-mathml"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"><semantics><mrow><mspace linebreak="newline"></mspace><mi>t</mi><mi>e</mi><mi>x</mi><mi>t</mi><mrow><mi>U</mi><mi>n</mi><mi>e</mi><mi>x</mi><mi>p</mi><mi>l</mi><mi>a</mi><mi>i</mi><mi>n</mi><mi>e</mi><mi>d</mi><mi>V</mi><mi>a</mi><mi>r</mi><mi>i</mi><mi>a</mi><mi>t</mi><mi>i</mi><mi>o</mi><mi>n</mi></mrow><mo>=</mo><mn>1</mn><mo>−</mo><msup><mi>r</mi><mn>2</mn></msup><mo>=</mo><mn>1</mn><mo>−</mo><mn>0.64</mn><mo>=</mo><mn>0.36</mn><mspace linebreak="newline"></mspace><mi>t</mi><mi>e</mi><mi>x</mi><mi>t</mi><mrow><mi>o</mi><mi>r</mi></mrow><mn>36</mn><mspace linebreak="newline"></mspace></mrow><annotation encoding="application/x-tex">\Unexplained Variation=1−r2=1−0\displaystyle \text{Unexplained Variation} = 1 - r^2 = 1 - 0.64 = 0.36 \ or \displaystyle \text{ or } 36\\%</annotation></semantics></math></span><span class="katex-html" aria-hidden="true"><span class="mspace newline"></span><span class="base"><span class="strut" style="height:0.8889em;vertical-align:-0.1944em;"></span><span class="mord mathnormal">t</span><span class="mord mathnormal">e</span><span class="mord mathnormal">x</span><span class="mord mathnormal">t</span><span class="mord"><span class="mord mathnormal" style="margin-right:0.10903em;">U</span><span class="mord mathnormal">n</span><span class="mord mathnormal">e</span><span class="mord mathnormal">x</span><span class="mord mathnormal" style="margin-right:0.01968em;">pl</span><span class="mord mathnormal">ain</span><span class="mord mathnormal">e</span><span class="mord mathnormal">d</span><span class="mord mathnormal" style="margin-right:0.22222em;">V</span><span class="mord mathnormal">a</span><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="mord mathnormal">ia</span><span class="mord mathnormal">t</span><span class="mord mathnormal">i</span><span class="mord mathnormal">o</span><span class="mord mathnormal">n</span></span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">=</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7278em;vertical-align:-0.0833em;"></span><span class="mord">1</span><span class="mspace" style="margin-right:0.2222em;"></span><span class="mbin">−</span><span class="mspace" style="margin-right:0.2222em;"></span></span><span class="base"><span class="strut" style="height:0.8641em;"></span><span class="mord"><span class="mord mathnormal" style="margin-right:0.02778em;">r</span><span class="msupsub"><span class="vlist-t"><span class="vlist-r"><span class="vlist" style="height:0.8641em;"><span style="top:-3.113em;margin-right:0.05em;"><span class="pstrut" style="height:2.7em;"></span><span class="sizing reset-size6 size3 mtight"><span class="mord mtight">2</span></span></span></span></span></span></span></span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">=</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.7278em;vertical-align:-0.0833em;"></span><span class="mord">1</span><span class="mspace" style="margin-right:0.2222em;"></span><span class="mbin">−</span><span class="mspace" style="margin-right:0.2222em;"></span></span><span class="base"><span class="strut" style="height:0.6444em;"></span><span class="mord">0.64</span><span class="mspace" style="margin-right:0.2778em;"></span><span class="mrel">=</span><span class="mspace" style="margin-right:0.2778em;"></span></span><span class="base"><span class="strut" style="height:0.6444em;"></span><span class="mord">0.36</span></span><span class="mspace newline"></span><span class="base"><span class="strut" style="height:0.6444em;"></span><span class="mord mathnormal">t</span><span class="mord mathnormal">e</span><span class="mord mathnormal">x</span><span class="mord mathnormal">t</span><span class="mord"><span class="mord mathnormal" style="margin-right:0.02778em;">or</span></span><span class="mord">36</span></span><span class="mspace newline"></span></span></span></span>\n\nComparing with the options, this corresponds to Option B. Note that the source key lists Option C (&#36;54\\%) as correct, which is a typographical error. The correct mathematical value is $36\\%$.\n\nHence, **Option B** is the correct answer.

About This Chapter: Correlation and Regression

Paper

Paper 3: Quantitative Aptitude

Weightage

4-6 Marks

Key Topics

Correlation Coefficient, Regression Equations

This chapter covers Correlation Coefficient, Regression Equations and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 4-6 Marks weightage. Focus on understanding core concepts rather than memorizing.

Key Concepts to Understand

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