Quiz 2 on Business Statistics

Section : 3
Semester: Fall 2020
Marks : 10 Time: 40 minutes

Name: Zahid Bin Ali ID: 2019110000010

1. For a distribution, four central moments are found to be as follows:

μ1=0, μ2=2.8 , μ3=0.6, μ4=14.8. Find 𝛽1 and 𝛽2 and hence comment on the nature of the
distribution (4)

Ans:
2. Explain the relationship between income and expenditure (3)
i. If correlation coefficient between income and expenditure is -0.57
ii. If correlation coefficient between income and expenditure is 0.95
iii. If correlation coefficient between income and expenditure is 0

Ans: The relationship between income and expenditure is often called a consumption

schedule.When there is more money or anticipation of income, more goods are purchased by
consumers. Meaning money is spent on expenditures, at times, even if there isn't
enough income to cover them.
The role of a non-trading firm is to provide services to its members. However, in order to do the
same, it needs to earn some revenue and incur certain expenditures.

3.Give a real life example of positive correlation, negative correlation and regression analysis.
(3)
Ans: Therefore, when one variable increases as the other variable increases, or one variable
decreases while the other decreases. An example of positive correlation would be height and
weight. Taller people tend to be heavier. An example of negative correlation would be height
above sea level and temperature.