ExamGecko
Home Home / IIBA / CBDA
Question list
Search
Search

List of questions

Search

Related questions











Question 152 - CBDA discussion

Report
Export

A data scientist is analyzing a dataset to determine if there is a strong relationship between two variables. A measure of covariance is done. Which of the following graphs indicate Zero Covariance between variables?

A.
2
Answers
A.
2
B.
1
Answers
B.
1
C.
4
Answers
C.
4
D.
3
Answers
D.
3
Suggested answer: C

Explanation:

Covariance measures the directional relationship between the returns on two assets. A positive covariance means that asset returns move together while a negative covariance means they move inversely. Zero covariance indicates that the returns on the two assets move independently of each other. In the context of a scatter plot, zero covariance is represented by a plot where the points do not show any upward or downward trend but are rather scattered randomly on the graph with no discernible pattern.

Graph 4 displays such a pattern where there is no apparent relationship between the variables on the x and y axes, indicating that there is zero covariance between them.


asked 18/09/2024
NEURONES TECHNOLOGIES
42 questions
User
Your answer:
0 comments
Sorted by

Leave a comment first