If There Is a Linear Relationship Between Two Variables, Then

question 100

Multiple Choice

If there is a linear relationship between two variables, then a change in one variable must be accompanied by __________ in the other variable.

• A) no change
• B) an exactly proportional change
• C) a larger change
• D) a disproportionally inverse change
• E) a smaller change

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Definitions:

Price-Earnings Ratio

A valuation metric for companies, calculated by dividing a company's share price by its earnings per share.

Earnings

The amount by which revenues exceed expenses.

Stockholders

Individuals or entities that own shares of stock in a corporation, thereby having a residual claim on the company's assets and earnings.

Solvency

This financial term refers to an entity's ability to meet its long-term financial obligations, indicating financial stability.