BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

RESEARCH METHODOLOGY

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
If variables a and b are highly correlated, then
A
there is no relationship between a and b.
B
a causes b
C
b causes a
D
there is a strong relationship between a and b
Explanation: 

Detailed explanation-1: -When independent variables are highly correlated, change in one variable would cause change to another and so the model results fluctuate significantly.

Detailed explanation-2: -The relationship between two variables is generally considered strong when their r value is larger than 0.7. The correlation r measures the strength of the linear relationship between two quantitative variables. Pearson r: • r is always a number between-1 and 1.

Detailed explanation-3: -A positive correlation-when the correlation coefficient is greater than 0-signifies that both variables move in the same direction.

Detailed explanation-4: -The magnitude of the correlation coefficient indicates the strength of the association. For example, a correlation of r = 0.9 suggests a strong, positive association between two variables, whereas a correlation of r =-0.2 suggest a weak, negative association.

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