A Correlation of R = −0

question 8

True/False

A correlation of r = −0.90 means that there is essentially no consistent relationship between X and Y.

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Definitions:

Inventory Purchase

The process of acquiring goods that a company will sell to customers or use in the production of goods to be sold.

Forward Contract

A financial derivative that represents an agreement to buy or sell an asset at a pre-agreed future point in time at a specified price.

Spot Rate

The current exchange rate at which a currency can be bought or sold for immediate delivery.

Settlement Date

The date on which a trade is finalized, and the buyer must make payment and the seller deliver the asset.