Question

QUESTION 1 Answer each of the following questions by TRUE or FALSE.

(1.1) The correlation coefficient between two variables is always between 0 and 1.

(1.2) The t−statistic is an indicator of the level of significance of correlation.

(1.3) The overall significance of a regression is determined by the R² .

(1.4) Moving average is a useful tool that helps dealing with seasonality in time-series.

(1.5) The seasonal index is an indicator of forecast accuracy

Answer 1

• (1.1) False,

• the correlation coefficient can take values in between -1 and 1

  Correlation coefficient above 0 means positive correlation

  And correlation coefficient below 0 means negative correlation.

  And when the correlation coefficient is 0, then there is no relationship between the two variables.

  Correlation coefficient above 0 indicates that bothe the variables are increasing.

  And when the correlation coefficient is below zero or negative then it indicates that one variable is increasing with decrease in another variable.