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Statistical Methods in Economics

Notes 14.5 Key-Words

1. Correlation : In the world of finance, a statistical measure of how two securities move in
relation to each other. Correlations are used in advanced portfolio management.
14.6 Review Questions

1. Define Correlation. Discuss its uses.
2. What is regression ? Explain clearly the significance of this concept with the help of an example.
3. Distinguish clearly between regression and correlation analysis giving suitable examples.
4. What are the similarities between correlation and regression analysis ?
5. Describe Correlation and Causation.

Answers: Self-Assessment
1. (i) F (ii)F (iii)T (iv)T (v)T
14.7 Further Readings

1. Elementary Statistical Methods; SP. Gupta, Sultan Chand & Sons,
New Delhi - 110002.
2. Statistical Methods — An Introductory Text; Jyoti Prasad Medhi, New Age
International Publishers, New Delhi - 110002.
3. Statistics; E. Narayanan Nadar, PHI Learning Private Limied, New Delhi - 110012.
4. Quantitative Methods—Theory and Applications; J.K. Sharma, Macmillan
Publishers India Ltd., New Delhi - 110002.

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