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Explain the concept of dependent and independent variables

In business, investors are always interested in the tradeoff between returns and risk. Regression analysis is a statistical technique that can be used to quantify this risk. Explain the concept of dependent and independent variables in terms of a business performance indicator e.g. stock price, profits, etc., clearly stating the dependent and independent variables involved. If you wish, feel free to use non-business example in your discussion.

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I will use a non- business example to clarify regression.

It is always interesting to understand relationship between variables. It helps people understand trends, make decisions and recommendations and even predictions.

In relationships, there are two types of variables. A dependent variable and an independent variable.

The dependent variable would be the outcome, what we are measuring or trying to understand (DV)
The independent variable(s) are those that change which influence the dependent variables. (IV)

Now, if you only have 1 IV, then it would be easy to examine ...

Solution Summary

The expert explains the concept of dependent and independent variables.

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