PROGRAM: BACHELOR OF BUSINESS ADMINISTRATION

Subject QUANTITATIVE TECHNIQUES

Subject Code BBA-201

Semester/Year 2nd Semester/1st Year

Section B
ASSIGNMENT No. 2
Assignment Title CORRELATION & REGRESSION
Student’s Name Bharat Khutela
Students Enroll. No. ASB/BBA/20/049
Student’s Signature* BHARAT KHUTELA

Submission Date 28th June, 2021

Due Date 28th June, 2021
Faculty Name Dr. Aakanksha Kishore
Marks Assigned by the
Faculty

Signature
Comments by the Faculty:

*By signing above, you attest that you have contributed to this submission and confirm that all
work you have contributed to this submission is your own work. Any suspicion of copying or
plagiarism in this work will result in an investigation of Academic Misconduct and may result in
a “0” on the work, or possibly more severe penalties, as well as a Disciplinary Notice on your
academic record.
Q1.  

X Y X2 Y2 XY
45 35 2025 1225 1575
70 90 4900 8100 6300
65 70 4225 4900 4550
30 40 0900 1600 1200
90 95 8100 9025 8550
40 40 1600 1600 1600
50 60 2500 3600 3000
75 80 5625 6400 6000
85 80 7225 6400 6800
60 50 3600 2500 3000
∑x = 610 ∑y = 640 ∑x2 = 40,700 ∑y2 = 45,350 ∑xy = 42,575

Pearsonian Correlation Coefficient (r)= n(∑xy) – (∑x) (∑y)

n∑(x2) – (∑x)2 n∑(y2) – (∑y)2
= 10×42575 - 610×640
10×40700 – 372100 10×45350 – 409600
= 425750 – 390400
186.81 × 209.52
= 35350
39140.43
= 0.903
Q2. Write short notes on the following:

1. Properties/ Interpretation of Correlation Coefficient

Ans: Properties of Correlation Coefficient are:

 The value of Correlation Coefficient (r) will always lie between -1 and +1.
 Coefficient of Correlation tell both magnitude and direction of the Corelation.
 Coefficient of Correlation is independent from change of origin i.e. if we subtract
or add any constant to all the variable in x and y the coefficient will remain same.
 It shows that the degree of relationship between two variables is always symmetric.
 Coefficient of Correlation is independent from change of scale i.e. if we multiply or
divide any constant to all the variables in x and y, the coefficient will remain
unchanged.
 Coefficient of Correlation measures only linear correlation between x and y.
 If x and y are independent of each other than Coefficient of Correlation is zero.

2.Properties/ Interpretation of Regression Coefficient

Ans: Properties of Regression Coefficient are:
 The sign of both the regression coefficients will be same, i.e. they will be either
positive or negative. Thus, it is not possible that one regression coefficient is
negative while the other is positive.
 The regression coefficients are independent of the change of origin, but not of the
scale i.e. there will be no effect on the regression coefficients if any constant is
subtracted or added from the value of X and Y but, if the value of X and Y is either
multiplied or divided by some constant, then the regression coefficients will also
change.
  If one of the regression coefficients is greater than unity, the other must be less
than unity.
Q3. Use least squares regression line to estimate the increase in
sales revenue expected from an increase of 7.5 per cent in
advertising expenditure.

(Hint: Assume sales revenue(y) is dependent on advt. expenditure

‘x’)

X Y XY X2
01 1 01 01
03 2 06 09
04 2 08 16
06 4 24 36
08 6 48 64
09 8 72 81
11 8 88 121
14 9 126 196
∑X = 56 ∑Y = 40 ∑XY = 373 ∑X2 = 524

Here,
X = 56/8 = 7
Y = 40/8 = 5
SSXY= ∑XY – (∑X)(∑Y)/n
= 373 - (56 × 40)/8
= 373 – 280
= 93
.l
SSXX= ∑X – (∑X) /n
2 2

= 524 – 3136/8
= 524 – 392
= 132

Now, the equation is:

y = a + bx

Where,
b= SSXY/SSXX
= 93/132
= 0.704

a= Y – bX
= 5 – (0.704 × 7)
= 5 – 4.92
= 0.08

Therefore, the equation is:

y = 0.08 + 0.7x

Therefore, putting x = 7.5, we get:

y = 0.08+ (0.7×7.5)
= 0.08+8.2
= 9

From this, we get that for 7.5% increase in Advertise expenditure, Sales
revenue increase by 9%.