Paper 4: Fundamentals of Business Mathematics & Statistic

6.40 I FUNDAMENTALS OF BUSINESS MATHEMATICS AND STATISTICS

Correlation and Regression

4992 51840

12

18252 186624

12

−

=

−

4992 4320 672 0.249

18252 15552 2700

= − = =

−

( )

YX 2

2

XY X Y

b N

X X

N

−

=

−

2

4992 120x432

12

1392 (120)

12

−

=

−

(^672672672) 3.5
1392 14400 1392 1200 192
12

= = − = =

−

Therefore, the two regresion coefficients are :

bXY = 0.249, bYX = 3.5

r b xb= XY YX = 0.249x3.5

= 0.8715 0.933=

Regression equation of X on Y is

X X b (Y Y)− = YX −

X - 10 = 0.249 (Y - 36)

X = 0.249Y - 8.964 + 10

X = 0.249Y + 1.036

Regression equation of Y on X is

(Y Y) b (X X)− = XY −

Y - 36 = 3.5 (X - 10)

Y = 3.5X - 35 + 36

Y = 3.5X + 1