Which of the Following Correlation Coefficients Indicates the Strongest Relationship

question 55

Multiple Choice

Which of the following correlation coefficients indicates the strongest relationship between two variables? That is, which one would enable us to make the most accurate predictions of one variable from the other?

• A) 0
• B) +.5
• C) -.9
• D) -.5

Learn metrics for measuring the efficiency of credit and collection management, like the average collection period.

Explore inventory management concepts relevant to financial management, including EOQ and carrying costs.

Calculate the operating cycle of a business.

Understand and calculate the cost related to revolving credit agreements.

---

Definitions:

Income

The total amount of money received by a person or company during a certain period, usually from work, investments, or business activities.

Loss

A financial condition where total expenses exceed total revenues, resulting in a negative profit.

Acceptance

The act of receiving or approving something, often used in the context of agreements or contracts.

Differential Cost

The difference in cost between two alternative decisions or scenarios, impacting the selection of one option over another.