The Strength and Direction of the Relationship Between the Two

question 10

Short Answer

The strength and direction of the relationship between the two variables are represented by a mathematical statistic formally known as a(n)_____.

---

Definitions:

Business-specific Risk

This is the risk associated with the unique factors impacting a specific company or industry, excluding broader market or economic risks.

Unsystematic Risk

The risk associated with a particular company or industry, which can be mitigated through diversification.

Diversification

The strategy of spreading investments among various financial assets to reduce risk.

Probability Distribution

A mathematical function that outlines every potential value and their probabilities that a random variable might assume across a specified interval.