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**Q.16. What is the nature of correlation if the value of r is â€“1? Ans. **When r is â€“1, there is perfect negative correlation between variables.

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(i) It is a real measure of correlation coefficient as it is based on arithmetic mean and standard deviation.

(ii) It finds out not only the direction but also the actual degree of correlation between variables.

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(i) The values of correlation coefficient are unduly affected by extreme values.

(ii) The assumption that there is a linear relation between variables is not always true.

(iii) The analysis of correlation coefficient requires a lot of care as there is a possibility of misinterpretation of results.

(iv) It involves long mathematical calculation and hence, is a time-consuming method.

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(i) It is easier to calculate and understand correlation using this method.

(ii) This method is the most appropriate for the calculation of correlation in case of qualitative and irregular facts.

(iii) This method can be employed for finding correlation even when the actual data is not given. Correlation can be found by simply using the ranks assigned to the values.

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(i) This method is not so definite.

(ii) This method cannot be used when number of items is very high.

(iii) This method is applicable only to individual series and not for frequency distributions.

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