If the Coefficient of Correlation Is 0

question 235

Multiple Choice

If the coefficient of correlation is 0.90,then the percentage of the variation in the dependent variable y that is explained by the variation in the independent variable x is:

• A)90%
• B)81%
• C)95%
• D)None of these choices.

Understand the concept of adverse selection and how it affects the insurance and labor markets.

Identify strategies used to mitigate the effects of adverse selection and moral hazard.

Comprehend the impact of private information on economic decisions and market efficiency.

Explain the role of correlated and independent risks in investment strategies and risk reduction.