Which of the Following Statements Is True About Correlation Statistics

question 7

Multiple Choice

Which of the following statements is true about correlation statistics?

• A)They cannot be calculated with nominal level variables.
• B)They can only be calculated with ratio-level variables.
• C)They can only be calculated with ordinal level variables.
• D)They can be calculated with variables at any level of measurement.

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Definitions:

Stock

An investment vehicle that denotes holding equity in a firm, granting the holder rights to a fraction of the company's assets and earnings.

Geometric Average

A method of calculating the average rate of return of a set of values that is compounded over time.

Arithmetic Average

A measure of central tendency calculated by dividing the sum of all values in a dataset by the number of values.

Geometric Average Returns

A method of calculating the average rate of return of an investment which accounts for the compound interest over time, often used to compare investment performance.