Question 5. What is the difference between correlation and causation? 6. If the correlation coefficient between two variables is -1, does it mean that the two variables are not are they related? Explain your answer. 7. What are the four main assumptions of a simple regression? 5. What is the difference between correlation and causation? 6. If the correlation coefficient between two variables is -1, does it mean that the two variables are not are they related? Explain your answer. 7. What are the four main assumptions of a simple regression?

(5)-1-Be difference betweenCorrelation and CacusationA Coorelation is aStaksstical indicator of the relationship betooen Vabrables.These Variables Change bogether, they Valy. But thrs Covaliation isn't necessar'ly due to derseck or indirect calsal link.Causakson means thak Chenges in one Vatiable brings about changee n the other. there is a Cause ard effeck relatisonship betcoen Varrable. The taro variables ale correlated wists each other and there os also a causal cink betweenthem.A Correlation doesn't imply Casuatison, but Casisation always implies coraelation.(6) If the Correlation Coetticient: between tavo Vabrable s's -1 , does it mean that the two veliables are not are they selated?Correlation is the degree of relationship between two co mose Vatsables. TRere are ditterent types of corvelation. Possshave And Negative Corvelation The degree of corselation is repor Setad by Cosselation Coetficient ' r '.when the value of tuto Vatinables moves in the Same directison, corsel ation is Said to be possinsve.og?. Pronce aros scepply.when the value of two Vasiable meves in the opposike diorection, Correlation sy fawd hobe ne g atsveeg \div Price and demand.The Coorelation CuefficientValue \gamma ' Lies between -1 and +1 .-3.When, \gamma=-1, there is a regative Pertect CorrelationWhen, \gamma=0, thare is so Codrelation betuleen the Vakiablel.When, \gamma=1, there is pertect Possstive Correlatison.So if the CoovelationCoetficierst betadean bcer Varsably ss -1, thiss means theat the turo Varsables are perfactly Correloted asd thele 59 a negotive aroelatison.The tevo vahabbles raves \hat{0} the appo sitr de'aectren.%g Prosk asd olemand. valaeAs one vatiable marrases Then the other Vahiable value decreases. Sômôlerly as one Valsable decreases then the other vatrate value morrashs.-4-(7) What dle the assumptsons of 9 somple regres86en?There ole four assumptrons Associated wsth a liveal regforsson model.(1) Cineatity: The relationship beteveen x and the mean of y is linear.(2) Horsosced ashocety: The vasianle of residual ss the same for any ralue of x(3) Independence: Observations Are Independent of hach other.(4) Dormale'ty: For any fixed Value of x, y is normally destonbuted - ...