You Generate a Pearson's Correlation Coefficient to Assess Whether Shareholder

question 8

Multiple Choice

You generate a Pearson's correlation coefficient to assess whether shareholder value is correlated with the number of employees hired at law firms. Which of the following statement is not accurate when employing this test?

• A) It can be used to measure 'effect size'.
• B) It varies between -1 and +1.
• C) It cannot be used with binary variables (those taking on a value of 0 or 1).
• D) It can be used on ranked data.

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Definitions:

One-way ANOVA

A statistical test that compares the means of three or more independent groups to determine if there is a significant difference among them.

Dependent Variable

In an experiment, it is the variable that is being tested and measured, expected to change as a result of modifications to the independent variable.

Television Viewing

The act of watching content on a television set or through television channels.

Squares Total

The sum of squared differences between each observation and the overall mean of the data set. It is a measure of total variation within a data set.