Target Exam

CUET

Subject

-- Applied Mathematics - Section B2

Chapter

Index Numbers and Time Based Data

Question:

Consider the following data

Year (x)

2010

2011

2012

2013

2014

Profit (Rs. in thousands) (y)

10

12

14

16

13

The equation of straight line trend by method of least square for the above data is given by

Options:

$y = 2x-26$

$y = 2x+26$

$y=x-1999$

$y = x - 13$

Correct Answer:

$y=x-1999$

Explanation:

The correct answer is Option (3) → $y=x-1999$

$n=5,\ \sum x=10060,\ \sum y=65,\ \sum xy=130790,\ \sum x^{2}=20240730$

$b=\frac{n\sum xy - (\sum x)(\sum y)}{n\sum x^{2} - (\sum x)^{2}} =\frac{5\times130790 - 10060\times65}{5\times20240730 - (10060)^{2}}=1$

$a=\frac{\sum y - b\sum x}{n}=\frac{65 - 1\times10060}{5}=-1999$

${\,\text{Trend line: }y = 1\! \cdot x - 1999\,}$