Using Pearson's R, the Closer the Correlation Coefficient Approaches _____

question 20

Multiple Choice

Using Pearson's r, the closer the correlation coefficient approaches _____, the weaker the relationship.

• A)-1
• B)+1
• C)0
• D)None of the above

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Definitions:

Capital Gains Yield

The price appreciation component of the total return on an investment, represented as a percentage of the initial investment cost.

Dividend Yield

The dividend per share divided by the price per share, indicating how much a company pays out in dividends each year relative to its stock price.

Constant-Growth Model

A method used to value a company's stock by assuming a constant rate of dividend growth, often used for companies with stable growth rates.

Market Return

The total return, including capital gains and dividends, from investing in a broad market index over a specified period.