I If the Coefficient of Correlation Is -0

question 94

Multiple Choice

i. If the coefficient of correlation is -0.81, what is the coefficient of determination?
ii. If the value of r is -0.96, what does this indicate about the dependent variable as the independent
Variable increases?
iii. If the correlation between sales and advertising is +0.6, what percent of the variation in sales can
Be attributed to advertising?

• A) 0.6561; it decreases; 36%.
• B) 0.6561; it increases; 36%.
• C) 0.6561; it decreases; 60%.
• D) 0.9; it decreases; 6%.
• E) 0.9; it increases; 60%.

---

Definitions:

Understated

Refers to figures or amounts that have been reported lower than they actually are, often affecting financial statements and analysis.

Lower-of-Cost

A principle that dictates inventory should be recorded at either its original cost or the market value, whichever is lower, to avoid overstating assets.

Ending Inventory

The total value of all inventory that a company has in stock at the end of an accounting period.

Inventory Accounting

The process of valuing and tracking physical stock and its cost flow from purchase to sale, used to determine cost of goods sold and inventory balance.