What Happens When a Correlation Is Nearer to 1

question 10

Multiple Choice

What happens when a correlation is nearer to 1.00 (plus or minus) ?

• A)The relationship between the variables becomes stronger.
• B)The relationship between the variables remains constant in terms of its strength.
• C)The variables become interdependent of each other.
• D)The relationship between the variables is terminated.

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Definitions:

Commercial Substance

A characteristic of a transaction indicating that it will result in a significant change in the economic circumstances of a business.

Future Cash Flows

The amount of money that is expected to be received or paid out by a business in the future.

Exchange of Assets

Transactions where businesses or individuals trade assets of similar value, such as property, equipment, or securities.

Units-Of-Production Method

A depreciation method allocating the cost of an asset over its useful life based on its level of activity or production.