Which of the Following Is Not True of Correlation

question 143

Multiple Choice

Which of the following is not true of correlation?

• A) The fact that there is a correlation between two variables means that one variable causes the other, but it isn't clear which is cause and which is effect.
• B) A negative correlation means that an increase in the value of one variable is associated with a decrease in the value of the other variable.
• C) The number in a correlation coefficient indicates the relative strength of the relationship between two variables-the higher the number, the stronger the relationship.
• D) Correlations are useful in making predictions. The stronger the relationship between the variables, the better the prediction.

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Definitions:

Annuity Due

An annuity in which the periodic payments occur at the beginning of each payment interval.

Compounded Monthly

Definition: The process where interest is calculated and added to the principal amount of the deposit or loan every month.

Lump Sum Deposit

A single and typically large payment made at once rather than being divided into multiple payments over time.

Compounded Semi-Annually

This involves computing interest on the original investment and the interest that has been accrued over two periods within the same year.