If the Coefficient of Correlation Between Two Projects Is 0

question 24

Multiple Choice

If the coefficient of correlation between two projects is 0, it would indicate that

• A) One project is cyclical and the other is somewhat less so
• B) Both projects react in a similar manner to a change in interest rates
• C) The factors that impact one project's success have no impact on the other project's success
• D) The projects are not well diversified
• E) The revenue from one project will equally offset the losses in the other

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Definitions:

Physiological Variable

A factor that can change and affect the functions of the body or its systems.

Negentropy

A measure of system complexity, order, or predictability; often considered the opposite of entropy.

Entropy

A measure of disorder or randomness in a system, often associated with the second law of thermodynamics, indicating the degree of dispersion of energy.

Hypertrophy

The enlargement of an organ or tissue from the increase in size of its cells, often related to physical exercise.