Exhibit 13-8

question 13

Multiple Choice

Exhibit 13-8.Among the considerations for assessing the utility of a correlation are: absolute size and predictive validity, comparisons to other correlations, and statistical significance.Choose the appropriate consideration to answer each of the following questions.
-Refer to Exhibit 13-8.Which of these assesses the likelihood that the observed correlation is a function of chance?

• A) absolute size and predictive validity
• B) comparisons to other correlations
• C) statistical significance

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Definitions:

Common Stock

Signifies holding stakes in a corporation, which provides owners with the right to vote and a portion of the company's earnings via dividends.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or under-valued.

Market Price

The current price at which an asset or service can be bought or sold, determined by demand and supply forces in the market.