Which of the Following Correlation Coefficients Indicates the Weakest Relationship

question 45

Multiple Choice

Which of the following correlation coefficients indicates the weakest relationship between two variables?

• A) -.36
• B) -.97
• C) +.75
• D) +.15

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Definitions:

Gross Margin

The difference between sales revenue and cost of goods sold, representing the profitability before deducting selling and administrative expenses.

Return On Total Assets

A financial ratio that measures how effectively a company is using its assets to generate profit, calculated as net income divided by total assets.

Return On Equity

A measure of financial performance calculated by dividing net income by shareholder's equity, indicating how well a company uses investments to generate earnings growth.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period.