What Does a Positive Linear Relationship Between X and Y

question 6

Multiple Choice

What does a positive linear relationship between x and y in a simple regression imply?

• A) Increases in the independent variable are usually accompanied by increases in the regressor
• B) The relationship between x and y cannot be explained by a straight line
• C) Decreases in the independent variable is usually accompanied by increases in the regressors
• D) Increases in the regressor are usually accompanied by increases in the dependent variable

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Definitions:

Down-Market Betas

Measures of how securities or portfolios perform relative to a benchmark during market downturns, reflecting their sensitivity to negative market movements.

Up-Market Betas

Measures of an asset's sensitivity to market movements, particularly during periods of rising market prices.

Geometric Average Return

The average rate of return on an investment per year, compounded annually, over a specified time period.

Arithmetic Return

The simple average of a series of returns generated over a period of time.