When Two Variables Have a Strong Negative Correlation, the Correlation

question 331

Multiple Choice

When two variables have a strong negative correlation, the correlation coefficient will be close to:

• A) -10.
• B) +1.
• C) 0.
• D) -1.

---

Definitions:

Conversion of Bonds

The process where bondholders can exchange their bonds for a predetermined number of shares in the issuing corporation.

Plant Assets

Long-term tangible assets that are used in the operation of a business and are not intended for sale.

Transactions

The economic events of a business that are recorded by accountants.

Revenues and Expenses

Financial metrics reflecting the income earned from normal business operations and the costs incurred to generate that income, respectively.