Correct Answer
✅ Option c — 0.106
All Options:
- A-0.106
- B9.375
- C0.106
- D0.0106
Detailed Solution & Explanation
1. **Given Equations**:
Let and represent the new variables.
2. **Determine the change of scale**:
We can express the relation between the variables as:
Standard deviation changes with scale only. Taking the standard deviation on both sides of the equations:
3. **Determine correlation coefficient ()**:
Let be the correlation coefficient between and , and be the correlation coefficient between and .
Since has a negative coefficient for and has a negative coefficient for , the product of their scale changes is .
Since the product is positive, the sign of the correlation coefficient does not change: .
4. **Calculate regression coefficient of on ()**:
The regression coefficient of on is given by:
The regression coefficient of on is given by:
Substitute the relations and :
Rounding to three decimal places yields .
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 SyllabusExam 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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