Correlation and RegressionMCQMTP May 19Question 3693 of 188
All Questions

What is spurious correlation?

Options

AIt is a bad relation between two variables.
BIt is very low correlation between two variables.
CIt is the correlation between two variables having no causal relation.
DIt is a negative correlation
For any discrepancies in this question, email contact@cadada.in

Correct Answer

Option cIt is the correlation between two variables having no causal relation.

All Options:

  • AIt is a bad relation between two variables.
  • BIt is very low correlation between two variables.
  • CIt is the correlation between two variables having no causal relation.
  • DIt is a negative correlation

Ad

Detailed Solution & Explanation

**Definition of Spurious Correlation:** **Spurious correlation** (also called nonsense correlation) refers to a statistical correlation that appears between two variables but is **not due to any direct causal relationship** between them. **Characteristics:** - The two variables may be correlated, but there is no logical/causal connection - The correlation may arise due to: 1. **A third variable** that is related to both (e.g., population growth affects both shoe sales and crime rates) 2. **Coincidence** in time series data 3. **Common cause** affecting both variables **Example:** Strong correlation between number of fire trucks sent and property damage — more trucks don't cause damage; a bigger fire causes both. Note: The given `correct_option` says 'b' (very low correlation), but spurious correlation is specifically defined as correlation with no causal relation (Option C). Hence, **Option C** 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

Related Comparison Tables

More Questions from Correlation and Regression

Ready to Master Correlation and Regression?

Practice all 188 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free