A Correlation Coefficient of -.80 Indicates a

question 64

Multiple Choice

A correlation coefficient of -.80 indicates a

• A) mild, inverse correlation.
• B) strong, inverse correlation.
• C) strong, direct correlation.
• D) nonexistent correlation.

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Definitions:

Equity Account

An account that represents the ownership interest of shareholders in a corporation, reflected in common and preferred shares.

Fixed Costs

Expenses that do not change with the level of production or sales activities, within a relevant period.

Variable Cost

Costs that vary in total in direct proportion to changes in the level of activity or volume of production.

Operating Leverage

The degree to which a firm or project can increase operating income by increasing revenue, reflecting the proportion of fixed costs to variable costs.