Which Statement About Correlation Is True?
I $r^{2}=0.95$ , the Response Variable Increases as the Explanatory Variable Increases

question 126

Multiple Choice

Which statement about correlation is true?
I. Regression based on data that are summary statistics tends to result in a higher correlation.
II. If $r^{2}=0.95$ , the response variable increases as the explanatory variable increases.
III. An outlier always decreases the correlation.

• A) I only
• B) II only
• C) none
• D) III only
• E) I, II, and III

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Definitions:

Fixed Expenses

Expenses that remain constant regardless of any variations in the volume of production or sales.

Break-Even Point

The level of sales at which profit is zero.

Contribution Margin Ratio

A financial metric that measures the proportion of sales revenue that exceeds variable costs and contributes to covering fixed expenses and generating profit.

Net Loss

The result when a company's total expenses exceed its total revenues during a specific period, indicating a negative profit.