The Appropriate Correlation Coefficient for Measuring for the Direction and Strength

question 46

Multiple Choice

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

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

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Profitability

The degree to which a company or business activity makes a profit, typically measured over a specific period of time.

Leverage

The use of borrowed funds to increase the potential return of an investment.

Solvency

A measure of a company's ability to meet its long-term financial obligations, reflecting its financial stability and health.

Profitability Analysis

Evaluation of a company's ability to generate profits from its operations, typically assessed through various financial metrics and ratios.