A Correlation of -1.00 Indicates That

question 6

Multiple Choice

A correlation of -1.00 indicates that:

• A)there is no relationship between the two variables.
• B)the two variables increase together.
• C)the two variables decrease together.
• D)as one variable increases, the other variable decreases.

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Definitions:

Day Trader

An individual who buys and sells financial instruments, such as stocks, within the same trading day, aiming to capitalize on short-term market fluctuations.

Investing

The act of dedicating resources (such as capital, time, or effort) to an endeavor with the expectation of achieving a profit or material result.

Standard Deviation

A statistical measure that quantifies the variability or spread of a set of numbers around their mean; it helps in assessing data consistency.

Q Index Fund

A type of investment fund that aims to replicate the performance of a specific index, often by holding the same assets as the index.