Paper 4: Fundamentals of Business Mathematics & Statistic

6.6 I FUNDAMENTALS OF BUSINESS MATHEMATICS AND STATISTICS

Correlation and Regression

Calculation by Method 1(a)

X= = =6X^60

N 10

Y= = =15Y 150

N 10

r = xy

Nσ σX y

x 58^2

σ =x =

N 10

(^) = 5.8 =2.408
y^286
σ =y = =2.93
N 10
r=^64
10×2.408×2.932
=^64
70.602
r =0.906
(Note: The above method should be used when specifically asked for, or if standard deviations are already
given in the question, otherwise the following method should be used as it is less cumbersome)
Calculation by Method 1(b)
r = xy
x y2 2
=^64
58×86
=^64
4988
=^64
70.62
r=0.906