Section b

1. The ABC Company shows the following in its books of accounts for the years 1977 through 1982.

Year	1977	1978	1979	1980	1981	1982
Turnover x	106	125	147	167	187	220
Profit y	10	12	16	17	18	22

Required:

1. Plot x variables (the independent variable) against y variables (the dependent variable). What relationship does this scatter diagram suggest? Explain (6 marks)

1. Complete the table below

Year	Turnover $ million	Profit $ (million)	xy	x2	y2
1977	106	10
1978	125	12
1979	147	16
1980	167	17
1981	187	18
1982	220	22
Total

(5 marks)

1. Determine the mathematical equation in the form of y = a + bx (6 marks)
2. Determine the profit (in millions) given 150 (million) of turnover (4 marks)
3. Calculate the product moment correlation (r) value and explain the meaning of this value (6 marks).
4. Compute the coefficient of determination (r) (r) and briefly interpret the value. (6 marks)

1. a. Distinguish Regression Analysis from Correlation Analysis. (4 marks)
   1. Cite two variables that are positively correlated (3 marks)
   2. Cite two variables that are negatively corrected (3 marks)

3. a. What is the range of correlation coefficient? (1 mark)

b.Correlation value of 1 means a strong positive correlation while

correlation value of -1 means a weak negative correlation. Agree or

disagree? Explain (2 marks)

c. What is the meaning of Spurious Correlation? (2 marks)

d. Give an example of two variables that are spuriously correlated.

(2 marks)