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If n = 5, sum xy = 80, sum x = 15, sum y = 20, then cov(x, y) equals
A5
B6
C4
D3
Answer & Solution
Correct answer: C. 4
1. cov(x, y) = (1/n) * sum(xy) - xbar * ybar.
2. xbar = 15/5 = 3; ybar = 20/5 = 4.
3. = (80/5) - 3*4 = 16 - 12.
4. = 4.
_Source: ICAI BoS Foundation Paper 3, Ch 17 'Correlation', p.6_
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