Which of the Following Correlation Coefficients Represents the STRONGEST Association

question 43

Multiple Choice

Which of the following correlation coefficients represents the STRONGEST association between two variables?

• A) -.88
• B) -.42
• C) +.30
• D) +.65

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Definitions:

Financial Risk

The possibility of losing money on an investment or business venture, including the risk of not receiving anticipated returns.

Retained Earnings

The portion of net income not distributed as dividends but retained by the company to be reinvested in its core business or to pay debt.

Source of Capital

Various origins from which businesses or individuals can obtain funds, including equity, debt, and internal generation.

Administrative Expenses

Overhead or general expenses related to the day-to-day running of a business, not directly tied to production.