The Pearson Product-Moment Correlation Coefficient, R, Requires That Variables Be

question 117

Multiple Choice

The Pearson product-moment correlation coefficient, r, requires that variables be measured with _____________.

• A)An interval or ratio scale.
• B)An ordinal or ratio scale.
• C)A nominal or ordinal scale.
• D)A nominal or ratio scale.

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Definitions:

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to present value future cash flows, or in the context of bond investments, it is the interest rate used by investors to compare different bond issues.

Capital Lease

A lease considered as a purchase of an asset, where the lessee records the leased asset as if it were owned.

Lease Payments

Regular payments made by a lessee to a lessor for the use of an asset, typically defined in a lease agreement.

Implicit Rate

The interest rate implied by the cash flows of a lease, not explicitly stated within the lease agreement.