In Simple Regression Analysis,if the Correlation Coefficient Is a Positive

question 98

Multiple Choice

In simple regression analysis,if the correlation coefficient is a positive value,then

• A)The Y intercept must also be a positive value.
• B)The coefficient of determination can be either positive or negative,depending on the value of the slope.
• C)The least squares regression equation could either have a positive or a negative slope.
• D)The slope of the regression line must also be positive.
• E)The standard error of estimate can either have a positive or a negative value.

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Definitions:

Expected Return

The anticipated profit or loss an investment is predicted to generate, acknowledging the potential for volatility and risk.

Beta

A means to compare the stability and risk factor of a security or portfolio relative to the market as a whole.

SML (Security Market Line)

A line that represents the expected return of an investment as a function of its risk, with the risk measured by the investment's beta.

Zero-investment Portfolio

A portfolio that is constructed without requiring any initial capital, typically by taking long and short positions that offset each other.