What Correlation Is Obtained When the Pearson Correlation Is Computed

question 48

Multiple Choice

What correlation is obtained when the Pearson correlation is computed for data that have been converted to ranks?

• A)The Spearman correlation
• B)The point-biserial correlation
• C)The phi coefficient
• D)It is still called a Pearson correlation.

---

Definitions:

Book Value

Book value is the net value of a company's assets minus its liabilities, often used to assess if a stock is under or overvalued.

Market-to-Book Ratio

A financial valuation metric comparing a company's current market price to its book value.

Common-Size Statement

A financial statement that presents all line items as a percentage of a common base figure, facilitating comparison across different periods or companies.

Net Fixed Assets

The total value of a company's physical assets (like machinery, buildings, equipment) minus depreciation, indicating the net book value of physical assets.