The Covariance Will Always

question 38

Multiple Choice

The covariance will always

• A) be a positive number.
• B) be larger than the variance.
• C) reflect the direction of the relationship.
• D) be less than 1.0.

---

Definitions:

Retail Method

An accounting technique used to estimate inventory value by calculating a cost to retail price ratio and applying it to the ending inventory at retail prices.

Merchandise Inventory

The total value of a retailer's goods that are available for sale to customers.

Estimated Cost

A prediction or forecast of the future cost of a project, operation, or production based on current data and trends.

Gross Profit Rate

A financial metric that measures the difference between sales and the cost of goods sold, expressed as a percentage of sales.