If Two Variables Are Highly Correlated, Then

question 51

Multiple Choice

If two variables are highly correlated, then

• A) they are also causally related.
• B) they are not causally related.
• C) they may be causally related, but the correlation does not allow any deductions concerning causality.
• D) the two variables must be related to a third variable before deductions of causality are possible.

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Definitions:

Financial Analysts

Professionals who evaluate investments, financial data, and economic trends to help make investment decisions or manage financial portfolios.

Currency Values

The worth of one country's currency in terms of another's, influenced by economic conditions and political stability.

Currency Cross Rate

The exchange rate between two currencies, calculated based on their common exchange rates with a third currency, usually the US dollar, without needing direct exchange between the two currencies.

Exchange Rate

The price at which one currency can be exchanged for another currency.