Pearson Correlation – NBC Institute

QTB – Nov 2015 – L1 – SB – Q5b – Statistics

Calculate Pearson’s correlation coefficient between company expenditure and income over eight years and interpret the result.

Question

An auditing firm is carrying out an analytical review of the financial transactions of its client, XYZ Manufacturing Company Limited. In order to ascertain the relationship that exists between the company’s annual expenditure and annual income, the following information was extracted from the company’s record for eight different years:

Years	1	2	3	4	5	6	7	8
Expenditure (x)	30	25	40	35	50	30	55	20
Income (y)	42	45	55	50	60	40	70	35

You are required to:

i. Calculate the Pearson’s product-moment correlation coefficient between $x$ and $y$ . (9 Marks)

ii. Comment on the result in (i). (1 Mark)

(Total: 10 Marks)

Answer

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Tags: Data Relationship, Expenditure, Financial Analysis, Income, Pearson Correlation
Level: Level 1

Topic: Statistics
Series: NOV 2015

QT – May 2018 – L1 – Q7b – Forecasting

Calculate Pearson and Spearman correlation coefficients for production cost and output data.

Question

The secretariat of an association of industries gathered the following data from a random sample of member firms that produce similar products:

Required:
i) Compute the Pearson’s product moment correlation coefficient for the data. (6 marks)
ii) Hence, compute the coefficient of determination. (2 marks)
iii) Comment on your answer in (ii). (2 marks)
iv) Compute Spearman’s rank correlation coefficient for the data and comment on your answer. (8 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Coefficient of Determination, Correlation, Pearson Correlation, Ranking, Spearman Correlation
Level: Level 1

Topic: Forecasting
Series: MAY 2018

QTB – Nov 2015 – L1 – SB – Q5b – Statistics

Calculate Pearson’s correlation coefficient between company expenditure and income over eight years and interpret the result.

Question

Years	1	2	3	4	5	6	7	8
Expenditure (x)	30	25	40	35	50	30	55	20
Income (y)	42	45	55	50	60	40	70	35

You are required to:

i. Calculate the Pearson’s product-moment correlation coefficient between $x$ and $y$ . (9 Marks)

ii. Comment on the result in (i). (1 Mark)

(Total: 10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Data Relationship, Expenditure, Financial Analysis, Income, Pearson Correlation
Level: Level 1

Topic: Statistics
Series: NOV 2015

QT – May 2018 – L1 – Q7b – Forecasting

Calculate Pearson and Spearman correlation coefficients for production cost and output data.

Question

The secretariat of an association of industries gathered the following data from a random sample of member firms that produce similar products:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Coefficient of Determination, Correlation, Pearson Correlation, Ranking, Spearman Correlation
Level: Level 1

Topic: Forecasting
Series: MAY 2018

Question Tag: Pearson Correlation

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QTB – Nov 2015 – L1 – SB – Q5b – Statistics

Calculate Pearson’s correlation coefficient between company expenditure and income over eight years and interpret the result.

QT – May 2018 – L1 – Q7b – Forecasting

Calculate Pearson and Spearman correlation coefficients for production cost and output data.

QTB – Nov 2015 – L1 – SB – Q5b – Statistics

Calculate Pearson’s correlation coefficient between company expenditure and income over eight years and interpret the result.

QT – May 2018 – L1 – Q7b – Forecasting

Calculate Pearson and Spearman correlation coefficients for production cost and output data.

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QTB – Nov 2015 – L1 – SB – Q5b – Statistics

Calculate Pearson’s correlation coefficient between company expenditure and income over eight years and interpret the result.

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QT – May 2018 – L1 – Q7b – Forecasting

Calculate Pearson and Spearman correlation coefficients for production cost and output data.

You're reporting an error for "QT – May 2018 – L1 – Q7b – Forecasting"

QTB – Nov 2015 – L1 – SB – Q5b – Statistics

Calculate Pearson’s correlation coefficient between company expenditure and income over eight years and interpret the result.

You're reporting an error for "QTB – Nov 2015 – L1 – SB – Q5b – Statistics"

QT – May 2018 – L1 – Q7b – Forecasting

Calculate Pearson and Spearman correlation coefficients for production cost and output data.

You're reporting an error for "QT – May 2018 – L1 – Q7b – Forecasting"

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