If the Correlation of Variables Is Close to 0, Then

question 28

Multiple Choice

If the correlation of variables is close to 0, then we expect to see:

• A) an upward sloping cluster of points on the scatterplot
• B) a downward sloping cluster of points on the scatterplot
• C) a cluster of points around a trendline on the scatterplot
• D) a cluster of points with no apparent relationship on the scatterplot
• E) no explanation of how the scatterplot looks based on the correlation

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Definitions:

Interest Rate Implicit

The interest rate in a lease that, when applied to the lease payments, discounts them to equal the fair value of the leased asset.

Direct Financing Lease

A lease agreement where the lessor purchases an asset and leases it out, effectively providing financing to the lessee without transferring ownership.

Net Investment

The total amount spent on buying fixed assets, minus any sales of these assets.

Dealer Profit

The difference between the price at which a dealer sells a good and the cost incurred to buy or produce that good, essentially the dealer's earning from the transaction.