I the Strength of the Correlation Between Two Variables Depends

question 3

Multiple Choice

i. The strength of the correlation between two variables depends on the sign of the coefficient of correlation. ii. A coefficient of correlation close to 0 (say, 0.08) shows that the relationship between two variables is quite weak.
iii. The coefficient of determination is found by taking the square root of the coefficient of correlation.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) is a correct statement but not (i) or (iii).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Fair Market Value

The price at which an asset would sell in the marketplace between a willing buyer and a willing seller, each having reasonable knowledge of the pertinent facts.

Trade-In Allowance

The amount credited to the buyer of a new item for the value of the old item that is being traded in as part of the transaction.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired.

Gain Or Loss

The financial result that occurs when the selling price of an asset differs from its purchase price.