If There Is a Very Strong Correlation Between Two Variables

question 28

Multiple Choice

If there is a very strong correlation between two variables, then the coefficient of correlation must be _____.

• A) much larger than 1, if the correlation is positive
• B) much smaller than 1, if the correlation is negative
• C) either much larger than 1 or much smaller than 1
• D) None of the answers is correct.

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Definitions:

Payables Period

The average number of days it takes a company to pay its invoices from suppliers, reflecting the company's credit terms with its suppliers.

Inventory Period

The average time it takes for inventory to be sold and replaced over a given period.

Cost of Goods Sold

This refers to the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.