The formula for β₁ is just: A) Covariance of x and y over variance of y B) Covariance of x and y over variance of x C) Covariance of x and y over the standard deviation of x D) Covariance of x and y over the standard deviation of y E) None of the above is correct
The formula for β₁ is just: A) Covariance of x and y over variance of y B) Covariance of x and y over variance of x C) Covariance of x and y over the standard deviation of x D) Covariance of x and y over the standard deviation of y E) None of the above is correct
The formula for β₁ is just: A) Covariance of x and y over variance of y B) Covariance of x and y over variance of x C) Covariance of x and y over the standard deviation of x D) Covariance of x and y over the standard deviation of y E) None of the above is correct
C) Covariance of x and y over the standard deviation of x
D) Covariance of x and y over the standard deviation of y
E) None of the above is correct
Definition Definition Measure of how two random variables change together. Covariance indicates the joint variability or the directional relationship between two variables. When two variables change in the same direction (i.e., if they either increase or decrease together), they have a positive covariance. When the change is in opposite directions (i.e., if one increases and the other decreases), the two variables have a a negative covariance.
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