If a Correlation Between Variables Is Quite Weak Why Would

question 3

Multiple Choice

If a correlation between variables is quite weak why would a researcher not conduct a regression analysis?

• A) It would be impossible to construct a regression equation.
• B) The correlation between variables could not possibly be statistically significant.
• C) Predicted values would be so inaccurate as to be virtually useless.
• D) all of the above

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Definitions:

Real Rate of Return

The real rate of return is the annual percentage profit earned on an investment, adjusted for changes in the price level due to inflation or deflation.

Nominal Return

The return on an investment without adjusting for inflation, representing the raw earnings or loss.

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Indifference Curve

A graph showing different combinations of two goods that provide equal satisfaction or utility to a consumer.