The Appropriate Correlation Coefficient for Measuring the Direction and Strength

question 31

Multiple Choice

The appropriate correlation coefficient for measuring the direction and strength of the linear relationship between two ranked or ordinal variables is

• A)the Spearman correlation coefficient
• B)the point-biserial correlation coefficient
• C)the phi correlation coefficient
• D)none of the above

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Definitions:

Break-even Sales

The amount of revenue required to cover total fixed and variable costs, resulting in neither profit nor loss.

Unit Selling Price

The price at which a single unit of a product is offered for sale to customers.

Unit Variable Costs

Expenses that vary directly with the production volume, consisting of costs like materials and labor that change with the level of production.

Break-even Sales

The amount of revenue needed to cover both the fixed and variable costs, resulting in neither profit nor loss.