Which Statement Is True of the Correlation Coefficient

question 193

Multiple Choice

Which statement is true of the correlation coefficient?

• A) It ranges from 0.00 to +1.00 and indicates the strength of the relationship between two variables.
• B) It ranges from -1.00 to +1.00 and indicates the strength and the direction of the relationship between two variables.
• C) It ranges from 0.00 to +1.00 and indicates the strength and the direction of the relationship between two variables.
• D) It ranges from -1.00 to +1.00 and indicates the strength of the relationship between two variables and the total variability of those measurements.

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Definitions:

Rate of Return on Investment

A measure of the profitability and efficiency of an investment, calculated by dividing the investment's gain by its cost.

Owners' Equity

refers to the owner's interest in the assets of a business after all liabilities have been deducted.

Net Income

The profit remaining after all expenses, taxes, and costs have been subtracted from total revenue.

Working Capital Ratio

A financial metric used to determine a company's ability to pay off its current liabilities with its current assets.