The covariance between two variables is(a) Strictly positive(b) Strictly negative(c) Always 0(d) Either positive or negative or zero
Question
The covariance between two variables is(a) Strictly positive(b) Strictly negative(c) Always 0(d) Either positive or negative or zero
Solution
To determine the covariance between two variables, we need to follow these steps:
- Calculate the mean of each variable.
- Subtract the mean from each value in the first variable to get the deviation of each value from the mean.
- Subtract the mean from each value in the second variable to get the deviation of each value from the mean.
- Multiply the deviations of each pair of values (one from each variable).
- Sum up all the products obtained in step 4.
- Divide the sum by the total number of observations minus 1 to get the covariance.
After following these steps, we will obtain a numerical value for the covariance. This value can be positive, negative, or zero, depending on the relationship between the two variables. Therefore, the correct answer to the question is (d) Either positive or negative or zero.
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