Commerce MCQs
Topic Notes: Commerce
MCQs and preparation resources for competitive exams, covering important concepts, past papers, and detailed explanations.
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
161
What does a correlation coefficient of zero between two variables indicate?
Answer:
r = 0
A correlation coefficient (r) of 0 indicates that there is no linear relationship between the two variables. This means that changes in one variable do not provide any information about the direction or magnitude of changes in the other variable. The variables are considered uncorrelated.
162
How is a regression model defined in terms of the relationship between response and explanatory variables?
Answer:
one response and one or more explanatory variables are related
A regression model is a statistical technique used to estimate the relationship between a single dependent variable (the response variable) and one or more independent variables (the explanatory variables). The goal is to model how the value of the response variable changes when any one of the explanatory variables is varied, while the others are held fixed.
163
What does regression analysis primarily measure?
Answer:
Functional relationship between X and Y variable
Regression analysis is a statistical technique used to estimate the functional relationship between a dependent variable and one or more independent variables. It helps in understanding how the value of the dependent variable changes when one of the independent variables is varied while others are held fixed.
164
If the coefficient of determination (R-squared) is a positive value, what can be inferred about the slope of the regression equation?
Answer:
could have either a positive or a negative slope
The coefficient of determination, R-squared, is the square of the correlation coefficient. Since any real number squared is non-negative, R-squared is always positive regardless of whether the relationship between variables is positive or negative. Therefore, the slope of the regression line can be either positive or negative, as R-squared does not indicate the direction of the relationship.
165
If the two regression coefficients are -0.8 and -0.2, what is the value of the correlation coefficient?
Answer:
-0.4
The correlation coefficient (r) is the geometric mean of the two regression coefficients (bxy and byx). Mathematically, r = ±√(bxy * byx). Here, r = ±√(-0.8 * -0.2) = ±√0.16 = ±0.4. Since both regression coefficients are negative, the correlation coefficient must also be negative, resulting in -0.4.
166
Which of the following is considered a primary cause of correlation between two variables?
Answer:
Direct relationship
Correlation refers to a statistical relationship between two variables. A direct relationship, where one variable influences the other or both are driven by a fundamental mechanism, is a primary cause of observed correlation. While common causes exist, a direct causal link is the most fundamental explanation for correlation.
167
If the regression coefficient of Y on X is 4/3, what can be inferred about the regression coefficient of X on Y?
Answer:
less than 1
The product of the two regression coefficients (bYX * bXY) equals the square of the correlation coefficient (r^2), which must be between 0 and 1. If bYX = 4/3 (which is > 1), then bXY must be less than 1 to ensure the product remains less than or equal to 1.
168
How is the coefficient of determination related to the correlation coefficient?
Answer:
Coefficient of determination is the squares of correlation coefficient
The coefficient of determination, denoted as R², is defined as the square of the Pearson correlation coefficient (r). It represents the proportion of the variance in the dependent variable that is predictable from the independent variable.
169
What is the classification for a statistical model that estimates the relationship between one dependent variable and a single independent variable?
Answer:
simple regression
Simple regression, or simple linear regression, is a fundamental statistical method used to analyze the relationship between two continuous variables. By fitting a straight line to the data, it allows analysts to determine how much the dependent variable changes in response to a unit change in the single independent variable, providing a clear and straightforward insight into the correlation between the two factors.
170
If the coefficient of determination (r²) is 0.64, what is the corresponding value of the coefficient of correlation (r)?
Answer:
0.80
The coefficient of correlation (r) is the square root of the coefficient of determination (r²). Given r² = 0.64, taking the square root of 0.64 yields 0.80. The coefficient of correlation measures the strength and direction of a linear relationship between two variables, while the coefficient of determination represents the proportion of variance in the dependent variable explained by the independent variable.