There Is a Strong Correlation Between the Number of Firefighters

question 23

Multiple Choice

There is a strong correlation between the number of firefighters that show up at a fire and the amount of damage produced by the fire. The size of the fire influences both the number of firefighters and the amount of damage. This illustrates that the relationship between the number of firefighters and the amount of damage is:

• A)caused by a third factor.
• B)causal.
• C)not correlational.
• D)a real relationship.
• E)unpredictable from the information given.

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Definitions:

Price-Earnings Ratio

A financial ratio that compares a company's market price per share to its earnings per share, indicating the value that investors place on a company's earning capacity.

Market Price

The price charged for an item on the open market.

Fixed Costs

Expenses that do not change with the level of production or business activity, such as rent, salaries, and insurance.

Gross Margin Percentage

A profitability ratio that shows the percentage of sales revenue remaining after deducting the cost of goods sold, indicating the financial health and performance of a company's core activities.