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Supplementary objective test questions

CHAPTER 10 – INTER-RELATIONSHIPS BETWEEN VARIABLES

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10.1 If Σx = 500, Σy = 200, Σx = 35,000, Σy = 9,000, Σxy = 12,000 and n =
10, calculate Pearson’s correlation coefficient to three d.p.
Answer …………………

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10.2 The coefficient of determination r explains the:

A Percentage variation in the dependent variable, which is explained by the
independent variable

B The relationship between the two variables

C The gradient, the intercept and the coefficient

D None of the above

10.3 A plc is trying to assess the extent to which its customers perceive its more
expensive products as being better. Towards this it has asked customers to rank
products by quality and it has then compared this to the ranking by price.
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If data comprising 100 pairs of corresponding ranks has d = 4,081 where d
represents the difference between corresponding ranks, what is
Spearman’s rank correlation coefficient?

Answer …………………(give your answer to 2 d.p.)

10.4 Having analysed the data from customer loyalty cards, A plc believes it has found
a link between how much is typically spent annually on Product X (y-variable)
and how much is spent on promoting product X to customers (y variable).

The correlation coefficient for ten thousand pairs of x- and y-values, with x
ranging from $5,000 to $10,000, is calculated to be 0.7 and the regression
equation is y = 650,000 + 15x.

Which TWO of the following statements are correct?

A When x = $6,000, the estimate of y = $740,000

B When x = $8,500, the estimate of y from the regression equation is likely to
be reliable

C When x = 0, the estimate of y from the regression equation is likely to be
reliable

D When x increases by $1, y increases by $0.70

E 70% of the differences in money spent on product X can be explained by
looking at differences in the advertising spend

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