Give an Example Showing Clearly That Two Variables Can Be

question 35

Short Answer

Give an example showing clearly that two variables can be statistically related without it being the case that one of them is the cause of the other.

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Definitions:

Held-to-maturity

A classification for investment securities which the investor has the intent and ability to hold until a specified maturity date.

Extent of Influence

Refers to the degree to which an investor can sway management decisions and operational policies of an investee due to ownership level or other factors.

Common Stock

A type of securities that represents ownership in a corporation, granting holders voting rights and a share in the company’s profits via dividends.

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies and to reflect this in the profit and loss statement proportionally to their ownership level.