Which of the Following Statements Is True?
A) the Correlation $\le$

question 46

Multiple Choice

Which of the following statements is true?

• A) The correlation coefficient reflects the joint movement of asset returns or default risk in the case of loans and lies between the values -1 \(\le\) r \(\le\) + 1, where r is the correlation coefficient.
• B) The correlation coefficient reflects the joint movement of asset returns or default risk in the case of loans and lies between the values 0 \(\le\) r \(\le\) + 1, where r is the correlation coefficient.
• C) The correlation coefficient reflects the joint movement of asset returns or default risk in the case of loans and lies between the values +1 \(\le\) r \(\le\)+ 2, where r is the correlation coefficient.
• D) The correlation coefficient reflects the joint movement of asset returns or default risk in the case of loans and lies between the values -1 \(\le\) r \(\le\) 0, where r is the correlation coefficient.

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Definitions:

Pretax Income

The amount of income earned by a business before paying taxes, also known as earnings before tax (EBT).

Overstated

When figures or amounts are reported higher than they actually are, potentially misrepresenting the financial condition of a business.

Inventory Accounting Methods

Different approaches to valuing and managing inventory, including FIFO (First In, First Out), LIFO (Last In, First Out), and weighted average cost.

FIFO Reserve

The difference between the cost of inventory calculated using the First In, First Out (FIFO) method and another inventory costing method.