Assume That There Is a Strong Positive Correlation Between Two

question 101

Multiple Choice

Assume that there is a strong positive correlation between two variables: variable A and variable B. If you know that a person's score on variable A is low,what would be your best prediction for the person's score on variable B?

• A)The person's score on variable B should also be low.
• B)The person's score on variable B should be high.
• C)The person's score on variable B should be average.
• D)The person's score on variable B should be below average.

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Definitions:

Homemade Leverage

The use of personal borrowing to adjust the overall level of financial leverage that an individual utilizes in their investments.

Capital Structure

Describes the mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, used to finance its overall operations and growth.