A $0.01$ Significance Level Is Being Used to Test a Correlation Between

question 44

Multiple Choice

A $0.01$ significance level is being used to test a correlation between two variables. If the linear correlation coefficient $r$ is found to be $0.591$ and the critical values are $r = \pm 0.590$ what can you conclude?

• A) There is not sufficient evidence to support the claim of a linear correlation between the two variables.
• B) There is sufficient evidence to support the claim of a linear correlation between the two variables.

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Definitions:

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Residual Value

The estimated value of an asset at the end of its useful life.

Present Value

Present value is a financial concept that calculates the current worth of a future sum of money or stream of cash flows, given a specific rate of return.

Cash Inflows

The total amount of money received by a company from its operational activities, investments, and financing.