Variables U and W Have a Correlation of -0

question 23

Multiple Choice

Variables U and W have a correlation of -0.86. If it is known that Keira has a low score on U, which statement would be the BEST prediction about her score on W?

• A) Keira is likely to have a high score on W.
• B) Keira is likely to have a low score on W.
• C) Keira's score on W is likely to be higher than her score on U.
• D) Keira's score on W cannot be predicted from her score on U.

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Definitions:

Underlying Source of Risk

Fundamental factors that can cause uncertainty in investment returns, including but not limited to market volatility, economic changes, and geopolitical events.

Real Assets

Real assets refer to physical or tangible assets such as land, buildings, gold, or commodities, which have intrinsic value.

Interest-Bearing Assets

Interest-bearing assets are financial assets that earn interest over time, such as savings accounts, bonds, or loans given to others.

Flexibility Option

An option that provides the holder with the ability to adapt or change an investment based on changing circumstances.