Paper 4: Fundamentals of Business Mathematics & Statistic

6.34 I FUNDAMENTALS OF BUSINESS MATHEMATICS AND STATISTICS

Correlation and Regression

(ii) given variance of marks in statistics (X) is 169 th of variance of marks in accountancy (Y)

i.e., X^29 Y^2

σ = 16 σ

X^2

Y^2

9

16

σ

σ

X

Y

9

16

σ

σ

X

Y

3

4

σ =

σ

XY X

Y

b r= σσ

0.6 r^3

4

=  

  

r 0.6x4

= 3

r = 0.8

Example 23 :

Following data relates to marks in accounts and statistics in B. Com. (Hons.) I Year Examination of a particular

year in University of Delhi.

Accounts Statistics

Mean 30 35

Standard deviation 10 7

Coefficient of correlation 0.8

Find two regression equations and calculate the expected marks in accounts if marks secured by a student

in statistics are 40

Solution:

Let the marks in accounts be denoted by X and the marks in statistics by Y.

we have

X = 30

Y = 35

σX=10

σY = 7

r = 0.8