Correlation and RegressionMCQMTP June 2023 Series IIQuestion 3771 of 188
All Questions

Correlation between unrelated variables is not because of:

Options

ACoefficient of non-determination
BExistence of third variable related to both the variables
CSpurious correlation
DNone of the above
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Correct Answer

Option cSpurious correlation

All Options:

  • ACoefficient of non-determination
  • BExistence of third variable related to both the variables
  • CSpurious correlation
  • DNone of the above

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Detailed Solution & Explanation

When correlation is observed between two variables that are not directly or causally related, it is referred to as **spurious correlation** or nonsense correlation. Such correlation can occur due to: 1. Pure chance or coincidence. 2. The existence of a third variable (confounding factor) that influences both variables. Thus, the correlation is not causally real, but rather spurious. The term 'spurious correlation' is the description/name of this phenomenon itself, rather than a cause of it. Therefore, the correlation between unrelated variables is not because of spurious correlation; spurious correlation is what we call it. 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

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