A Correlation Is Used to Understand

question 34

Multiple Choice

A correlation is used to understand:

• A) the probability of a difference in means between either two independent samples or a paired sample through time.
• B) the basic statistics, including the mean, standard deviation, minimums, and maximums of a data set.
• C) the frequency of the data using a display of rectangles with area proportional to the underlying frequency of the data.
• D) the extent to which variables are related to each other.

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Definitions:

ROE

Return on Equity, a measure of a company's profitability that reveals how much profit a company generates with the money shareholders have invested.

Inventories

Assets held for sale in the ordinary course of business, or in the process of production for such sale, or in the form of materials to be consumed in the production process.

Basic Earning Power

A measure of a firm's profitability and efficiency, calculated as earnings before interest and taxes divided by total assets.

Debt Ratio

The ratio of total debt to total assets, it measures the percentage of funds provided by investors other than preferred or common shareholders. Also called debt-to-assets ratio.