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Why Is a Numeric Association Between 2 Variables, Not Necessarily

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Essay

Why is a numeric association between 2 variables, not necessarily indicative of a cause-effect relationship between the variables? Explain with an example.


Definitions:

360-Day Year

A method used in accounting and finance that assumes a year has 360 days to simplify interest calculations.

Ordinary Simple Interest Rate

The standard interest rate applied to a loan or investment, calculated on the principal amount without compounding over a specific period.

360-Day Year

A financial calculation assumption where the year is considered to have 360 days for simplifying interest calculations.

Exact Simple Interest

Interest calculated precisely on the principal amount over a specific period, normally based on a 365-day year.

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