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While computing rank correlation coefficient between profit and investment for the last 6 years of a company the difference in rank for a year was taken 3 instead of 4. What is the rectified rank correlation coefficient if it is known that the original value of rank correlation coefficient was 0.4?
- a)0.3
- b)0.2
- c)0.25
- d)0.28
Correct answer is option 'B'. Can you explain this answer?
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While computing rank correlation coefficient between profit and invest...
Given:
- Rank correlation coefficient between profit and investment for the last 6 years of a company = 0.4
- Difference in rank for a year was taken 3 instead of 4
To find:
- Rectified rank correlation coefficient
Solution:
Let's first understand what is rank correlation coefficient.
Rank correlation coefficient is a statistical measure that measures the degree of association between two variables based on their ranks. It ranges from -1 to +1, where -1 indicates a perfect negative correlation, +1 indicates a perfect positive correlation, and 0 indicates no correlation.
Now, let's understand what is the impact of the difference in rank for a year on rank correlation coefficient.
If there is a difference in rank for a year, it means that the ranks assigned to the variables for that year are incorrect. This will lead to an incorrect calculation of rank correlation coefficient, as it is based on the ranks of the variables.
In this case, the difference in rank for a year was taken 3 instead of 4. This means that the ranks assigned to the variables for that year are incorrect by 1. To rectify this, we need to add 1 to the ranks of both the variables for that year.
Let's calculate the rectified rank correlation coefficient.
To calculate the rectified rank correlation coefficient, we need to first calculate the sum of squares of differences between the ranks of the variables.
Original sum of squares of differences = 6*(0.4-0)^2 = 0.96
Now, let's calculate the rectified sum of squares of differences.
Rectified sum of squares of differences = 5*(0.4-0)^2 + 1*(0.4-1)^2 = 0.8 + 0.36 = 1.16
The rectified sum of squares of differences is higher than the original sum of squares of differences, as the difference in rank for a year was rectified by adding 1 to the ranks of both the variables.
Now, let's calculate the rectified rank correlation coefficient using the formula:
Rectified rank correlation coefficient = 1 - (6/[(6^2)-1]) * (rectified sum of squares of differences)
Rectified rank correlation coefficient = 1 - (6/35) * 1.16 = 0.2
Therefore, the rectified rank correlation coefficient is 0.2.
Answer: Option B) 0.2
- Rank correlation coefficient between profit and investment for the last 6 years of a company = 0.4
- Difference in rank for a year was taken 3 instead of 4
To find:
- Rectified rank correlation coefficient
Solution:
Let's first understand what is rank correlation coefficient.
Rank correlation coefficient is a statistical measure that measures the degree of association between two variables based on their ranks. It ranges from -1 to +1, where -1 indicates a perfect negative correlation, +1 indicates a perfect positive correlation, and 0 indicates no correlation.
Now, let's understand what is the impact of the difference in rank for a year on rank correlation coefficient.
If there is a difference in rank for a year, it means that the ranks assigned to the variables for that year are incorrect. This will lead to an incorrect calculation of rank correlation coefficient, as it is based on the ranks of the variables.
In this case, the difference in rank for a year was taken 3 instead of 4. This means that the ranks assigned to the variables for that year are incorrect by 1. To rectify this, we need to add 1 to the ranks of both the variables for that year.
Let's calculate the rectified rank correlation coefficient.
To calculate the rectified rank correlation coefficient, we need to first calculate the sum of squares of differences between the ranks of the variables.
Original sum of squares of differences = 6*(0.4-0)^2 = 0.96
Now, let's calculate the rectified sum of squares of differences.
Rectified sum of squares of differences = 5*(0.4-0)^2 + 1*(0.4-1)^2 = 0.8 + 0.36 = 1.16
The rectified sum of squares of differences is higher than the original sum of squares of differences, as the difference in rank for a year was rectified by adding 1 to the ranks of both the variables.
Now, let's calculate the rectified rank correlation coefficient using the formula:
Rectified rank correlation coefficient = 1 - (6/[(6^2)-1]) * (rectified sum of squares of differences)
Rectified rank correlation coefficient = 1 - (6/35) * 1.16 = 0.2
Therefore, the rectified rank correlation coefficient is 0.2.
Answer: Option B) 0.2
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While computing rank correlation coefficient between profit and investment for the last 6 years of a company the difference in rank for a year was taken 3 instead of 4. What is the rectified rank correlation coefficient if it is known that the original value of rank correlation coefficient was 0.4?a)0.3b)0.2c)0.25d)0.28Correct answer is option 'B'. Can you explain this answer?
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While computing rank correlation coefficient between profit and investment for the last 6 years of a company the difference in rank for a year was taken 3 instead of 4. What is the rectified rank correlation coefficient if it is known that the original value of rank correlation coefficient was 0.4?a)0.3b)0.2c)0.25d)0.28Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about While computing rank correlation coefficient between profit and investment for the last 6 years of a company the difference in rank for a year was taken 3 instead of 4. What is the rectified rank correlation coefficient if it is known that the original value of rank correlation coefficient was 0.4?a)0.3b)0.2c)0.25d)0.28Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for While computing rank correlation coefficient between profit and investment for the last 6 years of a company the difference in rank for a year was taken 3 instead of 4. What is the rectified rank correlation coefficient if it is known that the original value of rank correlation coefficient was 0.4?a)0.3b)0.2c)0.25d)0.28Correct answer is option 'B'. Can you explain this answer?.
While computing rank correlation coefficient between profit and investment for the last 6 years of a company the difference in rank for a year was taken 3 instead of 4. What is the rectified rank correlation coefficient if it is known that the original value of rank correlation coefficient was 0.4?a)0.3b)0.2c)0.25d)0.28Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about While computing rank correlation coefficient between profit and investment for the last 6 years of a company the difference in rank for a year was taken 3 instead of 4. What is the rectified rank correlation coefficient if it is known that the original value of rank correlation coefficient was 0.4?a)0.3b)0.2c)0.25d)0.28Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for While computing rank correlation coefficient between profit and investment for the last 6 years of a company the difference in rank for a year was taken 3 instead of 4. What is the rectified rank correlation coefficient if it is known that the original value of rank correlation coefficient was 0.4?a)0.3b)0.2c)0.25d)0.28Correct answer is option 'B'. Can you explain this answer?.
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