Which of the Following Correlation Coefficients Represents a Situation in Which

question 100

Multiple Choice

Which of the following correlation coefficients represents a situation in which an increase in one variable is associated with an increase in the other variable?

• A) -.45
• B) -.61
• C) .00
• D) +.45

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Definitions:

Operating Assets

Assets that are used in the day-to-day operations of a business, such as machinery, buildings, and equipment.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows, reflecting the time value of money and risk of the investment.

Working Capital

The amount of available capital that a company has to run its day-to-day operations, calculated as current assets minus current liabilities.

Payback Period

The length of time required for an investment to recover its initial outlay in net cash inflows, an important metric in capital budgeting.