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Let X and Y be two variables with correl...

Let X and Y be two variables with correlation coefficient e. If the values of X and Y serires and changed such that the cov (X,Y) remains unchanged while the variance of X and Y becomes 4 times their original values, then find the new correlation coefficient between X and Y.

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To find the new correlation coefficient between X and Y after the changes in their variances, we can follow these steps: ### Step 1: Understand the correlation coefficient formula The correlation coefficient \( r \) between two variables X and Y is given by the formula: \[ r_{X,Y} = \frac{\text{Cov}(X,Y)}{\sqrt{\text{Var}(X) \cdot \text{Var}(Y)}} \] Where: - \(\text{Cov}(X,Y)\) is the covariance between X and Y. - \(\text{Var}(X)\) is the variance of X. - \(\text{Var}(Y)\) is the variance of Y. ### Step 2: Define the initial conditions Let: - The initial correlation coefficient be \( e \). - The initial covariance be \( \text{Cov}(X,Y) \). - The initial variances be \( \text{Var}(X) \) and \( \text{Var}(Y) \). From the formula, we can express the initial correlation as: \[ e = \frac{\text{Cov}(X,Y)}{\sqrt{\text{Var}(X) \cdot \text{Var}(Y)}} \] ### Step 3: Analyze the changes According to the problem: - The covariance \( \text{Cov}(X,Y) \) remains unchanged. - The variances of X and Y become 4 times their original values: - New variance of X: \( \text{Var}(X)_{\text{new}} = 4 \cdot \text{Var}(X) \) - New variance of Y: \( \text{Var}(Y)_{\text{new}} = 4 \cdot \text{Var}(Y) \) ### Step 4: Substitute into the correlation formula Now, we can find the new correlation coefficient \( r_{\text{new}} \): \[ r_{\text{new}} = \frac{\text{Cov}(X,Y)}{\sqrt{\text{Var}(X)_{\text{new}} \cdot \text{Var}(Y)_{\text{new}}}} \] Substituting the new variances: \[ r_{\text{new}} = \frac{\text{Cov}(X,Y)}{\sqrt{(4 \cdot \text{Var}(X)) \cdot (4 \cdot \text{Var}(Y))}} \] \[ r_{\text{new}} = \frac{\text{Cov}(X,Y)}{\sqrt{16 \cdot \text{Var}(X) \cdot \text{Var}(Y)}} \] \[ r_{\text{new}} = \frac{\text{Cov}(X,Y)}{4 \cdot \sqrt{\text{Var}(X) \cdot \text{Var}(Y)}} \] ### Step 5: Relate the new correlation to the old correlation From our initial correlation \( e \): \[ r_{\text{new}} = \frac{1}{4} \cdot \frac{\text{Cov}(X,Y)}{\sqrt{\text{Var}(X) \cdot \text{Var}(Y)}} \] Thus, \[ r_{\text{new}} = \frac{e}{4} \] ### Final Answer The new correlation coefficient between X and Y is: \[ \boxed{\frac{e}{4}} \]
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