Which Statement About Re-Expressing Data Is Not True

question 518

Multiple Choice

Which statement about re-expressing data is not true?
I. Unimodal distributions that are skewed to the left will be made more symmetric by taking the
Square root of the variable.
II. A curve in which the direction of the association changes from negative to positive
Will not benefit from re-expression.
III. One goal of re-expression may be to make the variability of the response variable more
Uniform.

• A) II only
• B) I only
• C) III only
• D) II and III
• E) I, II, and III

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Definitions:

Interest-Rate Sensitivity

The degree to which the price of an investment, often a bond, responds to changes in interest rates.

Bond Prices

The market value of bonds, which inversely fluctuates with interest rates: when rates go up, bond prices fall, and vice versa.

Coupon Rate

The yearly interest rate yielded by a bond, shown as a percent of its nominal value.

Price Sensitive

Characteristic of information or news that could influence the price of securities if it were made public.