If the Line That Comes Closest to All Points in a Scatter

question 4

Multiple Choice

If the line that comes closest to all points in a scatter diagram is perfectly straight, the correlation between the two variables is

• A)linear.
• B)curvilinear.
• C)positive.
• D)unknown.

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Definitions:

Liquidity Measures

Financial metrics used to determine how quickly a company can turn its assets into cash to meet short-term obligations. Common measures include current ratio and quick ratio.

Current Ratio

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets.

Cash Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its cash and cash equivalents alone.