In Calculating the Pearson Correlation Coefficient, We Assume That

question 25

Multiple Choice

In calculating the Pearson correlation coefficient, we assume that:

• A) when the correlation coefficient is weak, there is a consistent, systematic relationship between the two variables.
• B) the relationship we are trying to measure is curvilinear.
• C) the variables we want to analyze have a binomially distributed population.
• D) the variables have been measured using interval- or ratio-scaled measures.
• E) when the correlation coefficient is strong and significant, the two variables are associated in a curvilinear fashion.

---

Definitions:

Service Life

The estimated period during which an asset is expected to be usable for its intended purpose, affecting depreciation calculations.

Fair Value

An estimate of a security's worth on a given market based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.

Non-Cancelable

A contract or agreement clause indicating that the arrangement cannot be terminated before its expiration.