Which Statement About the Correlation Coefficient,r,is True

question 81

Multiple Choice

Which statement about the correlation coefficient,r,is true?

• A) The correlation coefficient computed for a population is denoted by ρ(rho).
• B) Data obtained by using rating scales with a small number of categories tends to deflate r.
• C) The calculation of r assumes that X and Y are metric variables whose distributions have the same shape.
• D) All of the statements are true.

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Definitions:

Residual Income

The income that remains after all costs and expenses, including the cost of capital, have been subtracted from net income.

Average Invested Capital

The average amount of money invested in a company over a certain period, used to evaluate the company's financial performance.

Investment Turnover

An indicator of how effectively an organization is using its invested capital to produce income.

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales generated, expressed as a percentage.