What Would You Conclude If a Sample Correlation Coefficient Is

question 291

Multiple Choice

What would you conclude if a sample correlation coefficient is equal to -1.00?

• A)All the data points must fall exactly on a straight line with a positive slope.
• B)All the data points must fall exactly on a straight line with a negative slope.
• C)Most of the data points must fall exactly on a straight line with a positive slope
• D)Most of the data points must fall exactly on a horizontal straight line

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Definitions:

Short-Term Debt-Paying

Refers to a company's ability to meet its short-term financial liabilities and obligations.

Acid-Test

A stringent financial ratio that measures the ability of a company to pay off its current liabilities with its most liquid assets (cash, marketable securities, and accounts receivable).

Horizontal Analysis

A financial analysis technique used to evaluate trends over time by comparing line items in financial statements, such as assets, liabilities, and equity, across multiple periods.

Liquidity Ratios

Financial metrics used to determine a company's ability to pay off its short-term debts with its current assets.