Which of the Following Is Not a Characteristic of Correlational

question 3

Multiple Choice

Which of the following is not a characteristic of correlational studies?

• A) They help researchers understand cause and effect.
• B) They indicate the strength of a relationship between variables.
• C) When two variables are highly related, knowledge about one variable can be used to make predictions about the other variable.
• D) They are helpful in generating hypotheses for experimental research.

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Definitions:

Firm-specific Variances

Variability in a company's stock price or financial performance that is attributable to internal factors unique to the company, rather than broader market influences.

Macroeconomic Factor

A Macroeconomic Factor is a condition or variable that impacts the economy at a broad scale, including inflation, unemployment, and economic growth rates.

Single-Index Structure

A model used in finance to describe the returns of a portfolio using a linear relationship between the return of the portfolio and the return of a market index.

Expected Returns

The anticipated average return on an investment, taking into account the probability of different outcomes, including both gains and losses.