Value of Correlation Coefficient (

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Target Exam

CUET

Subject

Economics

Chapter

Correlation

Question:

Value of Correlation Coefficient (r)	Description
1. r = 0	A. two variables are uncorrelated
2. r = -1	B. the correlation is perfect
3. high value of r	C. strong linear relationship
4. low value of r	D. weak linear relation

Options:

1- B, 2-A, 3-D, 4-D

1- D, 2-B, 3-C, 4-A

1- A, 2-B, 3-C, 4-D

1- B, 2-A, 3-C, 4-D

Correct Answer:

1- A, 2-B, 3-C, 4-D

Explanation:

The correct answer is Option 3:

Value of Correlation Coefficient (r)	Description
1. r = 0	A. two variables are uncorrelated
2. r = -1	B. the correlation is perfect
3. high value of r	C. strong linear relationship
4. low value of r	D. weak linear relation

If r = 0 the two variables are uncorrelated. There is no linear relation between them.

• If r = 1 or r = –1 the correlation is perfect and there is exact linear relation.

• A high value of r indicates strong linear relationship. Its value is said to be high when it is close to +1 or –1.

• A low value of r (close to zero) indicates a weak linear relation. But there may be a non-linear relation.