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How Is the Strength of the Relationship Between Two Variables

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How is the strength of the relationship between two variables evaluated in a correlational analysis?


Definitions:

Risk-Free Rate

The return on an investment with zero risk, typically represented by the yield on government bonds.

Forward Rate

An agreed-upon price for a financial transaction that will occur at a future date, used in the trading of currencies, commodities, and financial instruments.

Risk-Free Rate

A speculative return rate on a risk-free investment, often exemplified by government bond yields.

Future Exchange Rate

The future exchange rate is the agreed-upon rate at which two currencies will be exchanged on a specified future date, used in hedging and trading strategies.

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