If the Correlation Coefficient (R) = 1.00, Then

question 73

Multiple Choice

If the correlation coefficient (r) = 1.00, then

• A) the Y-intercept (b₀) must equal 0.
• B) the explained variation equals the unexplained variation.
• C) there is no unexplained variation.
• D) there is no explained variation.

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Definitions:

Legal Capital

The minimum amount of equity that a company must maintain to protect creditors, often required by law.

Share Capital

The total amount of money raised by a company through the sale of shares to shareholders; represents the equity funding of the business.

Stock Dividends

A form of dividend paid by a company to its shareholders in the form of additional shares, rather than cash.

Market Price

The current price at which an asset or service can be bought or sold in a public market.