All of the Following Statements About the Pearson's Correlation Coefficient

question 42

Multiple Choice

All of the following statements about the Pearson's correlation coefficient are true, except:

• A) the Pearson's correlation coefficient, r, is a statistical measure of the covariation between two variables.
• B) the Pearson's correlation coefficient, r, ranges from 0 to 1.
• C) no correlation is indicated if the Pearson's correlation coefficient, r, equals 0.
• D) a perfect positive linear relationship exists if the Pearson's correlation coefficient, r, equals 1.

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Definitions:

Liquidity Ratios

Financial metrics used to determine an organization's ability to pay off its short-term debts with its liquid assets.

Exchange Rates

The value of one currency for the purpose of conversion to another, influencing international trade and investment.

Consolidated Financial Statements

Consolidated Financial Statements are financial reports that combine the financial position, results of operations, and cash flows of a parent company and its subsidiaries into one document.

Profitability Ratios

Financial metrics that are used to assess a business's ability to generate earnings in comparison to its expenses and other relevant costs incurred during a specific period of time.