Correlation and Regressions
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What does the correlation coefficient measure?
The correlation coefficient measures the strength and direction of the linear relationship between two variables, ranging from -1 to +1.
What is the purpose of regression analysis in banking?
To predict one variable from another using statistical relationships.
What is a positive correlation in banking context?
A positive correlation means both variables move in the same direction, e.g., when GDP rises, bank credit demand also tends to rise.
What is a perfect positive correlation?
Correlation coefficient equal to +1 indicating perfect direct relationship.
What is a negative correlation?
A negative correlation means the two variables move in opposite directions, e.g., as interest rates rise, bond prices fall.
What is a perfect negative correlation?
Correlation coefficient equal to -1 indicating perfect inverse relationship.
What does a correlation coefficient of zero imply?
A correlation coefficient of zero implies no linear relationship between the two variables, though a non-linear relationship may still exist.
What is the regression line of X on Y used for?
To estimate X values given corresponding Y values.
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