If a Computed Pearson's Correlation Coefficient Is Statistically Significant at the .01

question 22

Multiple Choice

If a computed Pearson's correlation coefficient is statistically significant at the .01 level,

• A) the correlation coefficient is extremely accurate.
• B) the two variables are positively correlated.
• C) an important relationship is evident.
• D) it is highly likely that a relationship exists between the two variables in the population.
• E) it is highly unlikely that a relationship exists between the two variables in the population.

---

Definitions:

Bond

A fixed-income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental, which pays periodic interest and the return of the principal at maturity.

Treasury Bill

Short-term, highly liquid government debt obligation issued at a discount from the face value and returning the face amount at maturity.

Par Value

The nominal value of a security stated by the issuer.

Effective Annual Yield

This refers to the real return on an investment, taking into account the effects of compounding interest over a year.