If the Correlation Between Variables a and B Is +0

question 26

Multiple Choice

If the correlation between variables A and B is +0.7, then

• A) we can use measurements of A to make moderately accurate predictions of the value of B.
• B) the mean value of B is greater than the mean value of A.
• C) the mean value of A is greater than the mean value of B.
• D) as variable A increases, variable B tends to decrease.

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Definitions:

Forecasting Error

The difference between the actual value and the predicted value in forecasting, indicating the accuracy of the prediction.

Capital Expenditure

Resources allocated by a corporation to purchase or improve tangible assets like land, factories, or machinery.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much contributes to fixed costs and profits.