This Type of Correlation Coefficient Indicates That the Variables Change

question 1

Multiple Choice

This type of correlation coefficient indicates that the variables change simultaneously in opposite directions--as one grows larger, the other gets smaller:

• A) no correlation
• B) positive correlation
• C) zero correlation
• D) neutral correlation
• E) negative correlation

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Definitions:

Operating Cycle

The period between the acquisition of inventory and the collection of cash from receivables.

Compensating Balances

Compensating balances are minimum balance requirements that a bank may impose on a borrower, kept in a non-interest-bearing account, as part of loan agreements.

Cash Conversion Cycle

The cash conversion cycle measures the time it takes for a company to convert resource inputs into cash flows, indicating the efficiency of managing inventory and receivables.

Receivable into Cash

The process or activity of converting money that is owed to a company by its customers into actual cash, usually through collection efforts.