Imagine That You Could Draw a Line Through the Points

question 48

Multiple Choice

Imagine that you could draw a line through the points on a scatter plot depicting the relation between X and Y that slopes upward from left to right.Which of the following is a possible value for the correlation coefficient that you would compute from these data?

• A) -1.0
• B) -0.5
• C) 0
• D) 1.0

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Definitions:

Flotation Costs

The financial outlay a firm encounters when releasing new securities, involving charges for legal matters, underwriting, and registering the issuance.

Issuance

The act of making something available or distributing it officially, commonly used in the context of financial securities being issued to the public.

New Securities

Financial instruments recently issued by a corporation or government entity to raise funds from investors.

Cost of Equity

The theoretical payment a company offers to its shareholders as compensation for the risk they assume by investing their funds.