Which of the Following Statements Is Correct When All the Actual

question 189

Multiple Choice

Which of the following statements is correct when all the actual values of y are on an upward sloping regression line?

• A)The coefficient of correlation is equal to one and the sign of the coefficient of correlation will be negative but the sign of the slope with be positive.
• B)The coefficient of correlation and the slope must both be equal to 1.
• C)The coefficient of correlation is equal to one and the sign of the coefficient of correlation and the sign of the slope will both be positive.
• D)The coefficient of correlation and the slope must be equal to - 1.

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Definitions:

Underlying Variable

A factor that can influence the outcome of a financial instrument or contract, such as interest rates, exchange rates, or commodity prices.

Initial Net Investment

The total amount of money required to initialize a project, investment, or venture, net of any financing.

Market Factors

Elements that influence the trading of goods and services, such as supply and demand, price, and competition.

Derivative Financial Instrument

A financial contract whose value is derived from the performance of assets, interest rates, currency exchange rates, or indices.