New SIDBI Grade A New Batch Starts on Nov 18

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    Question

    If x and y are two random variables and a, b, c, d are any numbers provided a ≠ 0, c ≠ 0, then correlation co-efficient between ax + b and cy + d is -

    A r (ax + b, cy + d) = (ab/cd) r(x, y) Correct Answer Incorrect Answer
    B r (ax + b, cy + d) = (ac/bd) r(x, y) Correct Answer Incorrect Answer
    C r (ax + b, cy + d) = (|ac/bd|) r(x, y) Correct Answer Incorrect Answer
    D r (ax + b, cy + d) = (ac/|ac|) r(x, y) Correct Answer Incorrect Answer

    Solution

    If x and y are two random variables and a, b, c, d are any numbers provided a ≠ 0, c ≠ 0, then correlation co-efficient between ax + b and cy + d is r (ax + b, cy + d) = (ac/|ac|) r(x, y). r is independent of change of origin and scale but it is dependent on change of sign.

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