Which Correlation Coefficient Indicates the Strongest Relationship

question 34

Multiple Choice

Which correlation coefficient indicates the strongest relationship?

• A) 0.00
• B) +0.50
• C) -0.70
• D) +0.60

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Definitions:

Investment Grade

A credit rating indicating a low risk of default, used to classify bonds that are considered safe investments.

BBB

A bond credit rating given to a medium credit quality debt instrument, indicating moderate risk.

Primary Market Transaction

Deals with the issuance of new securities directly from the issuer to investors.

Secondary Market Transaction

The buying and selling of previously issued securities, such as stocks and bonds, between investors, rather than directly from issuing companies.