With reference to calculation of trend values if $n =7, ∑y= 630, ∑xy = 56 $ and $∑x^2 = 28,$ select the correct statements ?
(A) The value of 'a' of straight line trend is 2.
(B) The value of 'b' of a straight line trend is 2.
(C) Straight line trend equation is represented by $y = a- bx.$
(D) The algebraic sum of deviation of the actual values from trend values is -1.
(E) In a free hand curve method the area above the trend line should be almost equal to the area below it.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (B) and (E) only
The straight line trend equation,
$y=a+bx$
(B) $b=\frac{∑xy}{∑x^2}=\frac{56}{28}=2$
$a=\frac{∑y}{n}=\frac{630}{7}=90$
(E) In a free-hand method, the area above the trend line should be almost equal to area below it.