What Does a Coefficient of Correlation of 0

question 122

Multiple Choice

What does a coefficient of correlation of 0.70 infer?

• A) There is almost no correlation because 0.70 is close to 1.0.
• B) 70% of the variation in one variable is explained by the other variable.
• C) The coefficient of determination is 0.49.
• D) The coefficient of nondetermination is 0.30.

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Definitions:

Diluted Earnings

A calculation of a company's earnings that takes into account all potential shares that could be claimed or converted into common stock, impacting the earnings per share metric.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning weights to some of the numbers more than others.

Stock Options

Financial instruments granting the holder the right, but not the obligation, to buy or sell a stock at a specified price within a certain period.

GAAP

Generally Accepted Accounting Principles, which are standards and conventions for financial reporting in the United States.