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Mathematical Economics-Online Practice Exam 9

Test

Question

1. Which of the following is correct?

r ≥ 1

– 1 ≤ r ≤ 0

r ≤ 1

0 ≤ I r I ≤ 1

Question

2. Which of the following statements is/are not correct ?

1. Correlation coefficient is always positive
2. Scatter diagram helps in determining the degree of correlation
3. If r = + 1 or – 1, the correlation will be perfect.
4. Correlation coefficient is a relative measure.

II, III and VI

II and III

I, II and III

I and II Only

Question

3. Which of the following is/are correct?

1. Correlation coefficient is a relative measure.
2. -1  < r  < 1
3. If r = + or – 1, the correlation will be perfect.
4. Correlation coefficient measures only the degree of linear relationship.

Answers

I and II only

II and III Only

I , II and III only

All the four

Question

4. Which of the following is/are correct ?

1. Negative correlation means that both the variables have decreasing values.
2. Positive correlation means that both the variables have increasing values.
3. If the direction of change in the two variables in the same, the two variables will be positively correlated.
4. If the change in the two variables is in opposite direction, the correlation will be negative.

II and IV

All the four

I and II only

III and IV Only

Question

5. Which of the following is an example of positive and perfect correlation ?

Answers

X + Y = 20

X – Y = 20

2x + 3y= 25

None of the above

Question

6. Which of the following is an example of negatives and perfect correlation ?

Answers

X + Y = 20

X – Y = 20

3x + 2y = 20

None of the above

Question

7. If x = y + 2, then –

r = – 2

r = – 1

r = 0.5

r = + 1

Question

8. Which of the following is/are correct ?

1. If x = 2y, x and y will be perfectly correlated.
2. If x = 30 – y, there will be a perfect negative correlation between x and y
3. If x = y + 2, r = + 1
4. R = 0 means absence of correlation.

I and II Only

II and IV Only

I , II and IV

All the four

Question

9. Which of the following statements is true ?

Answers

Correlation coefficient is independent of change in origin and scale

The correlation coefficient increases with the number of paired observations

If SD2 = 0, the rank correlation = 1 and if ΣD2 = 1, the rank correlation = 0

Coefficient of correlation between height and weight is 1.4

Question

10. Which of the following is correct ?

Answers

Rank correlation can be computed only for quantitative data

The coefficient of correlation has the same unit as the Pearson’s r

The coefficient of correlation can be calculated only if both the variables are in the same unit

The correlation between the age of applicants for life insurance and premium of insurance is positive

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