Consider the Following to Answer the Question(s) Below

question 12

Multiple Choice

Consider the following to answer the question(s) below:
A consumer research group investigating the relationship between the price of meat (per kilogram) and the fat content (grams) gathered data that produced the following scatterplot.
-Shown below is a correlation table showing correlation coefficients between stock price, earnings per share (EPS) , and the price/earnings (P/E) ratio for a sample of 19 publicly traded companies. Which of the following statements is false? Correlation: Stock Price, EPS, P/E

• A) Since r = 0.323 for P/E and Stock Price, there is a relatively weak positive correlation between P/E and Stock Price.
• B) The strongest correlation is between EPS and Stock Price.
• C) There is a weak negative correlation between P/E and EPS.
• D) The strongest correlation is between P/E and Stock Price.
• E) The weakest correlation is between P/E and EPS.

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Definitions:

Defined Contribution Plan

A retirement plan where an employee, employer, or both make contributions on a regular basis, but the final benefit received depends on the plan's investment performance.

Risk-free Return

The theoretical return on an investment with zero risk of financial loss, typically associated with government bonds.

Standard Deviation

A statistical measurement that depicts the variation or dispersion of a set of values, commonly used in finance to measure the volatility or risk of an investment.

Defined Contribution Plan

A type of retirement savings plan where the amount contributed to the plan is defined, but the future benefit amounts are not guaranteed.