You Generate a Pearson's Correlation Coefficient to Assess Whether Shareholder

question 8

Multiple Choice

You generate a Pearson's correlation coefficient to assess whether shareholder value is correlated with the number of employees hired at law firms. Which of the following statement is not accurate when employing this test?

• A) It can be used to measure 'effect size'.
• B) It varies between -1 and +1.
• C) It cannot be used with binary variables (those taking on a value of 0 or 1).
• D) It can be used on ranked data.

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Definitions:

Selling Expenses

Costs incurred directly and indirectly from selling a product or service, including advertising, salaries for sales staff, and distribution expenses.

Inventory Expenses

Costs associated with ordering, storing, and managing inventory, including but not limited to purchase costs, storage fees, and losses due to shrinkage.

Selling Expense

Costs incurred directly and indirectly in making sales; these can include advertising, sales staff salaries, and commissions.

Periodic Inventory Method

An accounting method that updates inventory and cost of goods sold figures at the end of an accounting period, not at each sale.