Looking at the Table Below, Which Variables Were the Most

question 1

Multiple Choice

Looking at the table below, which variables were the most strongly correlated? $$\begin{array} { | l | l | l | l | l | } \hline & & { \text { Work ethic } } & \text { Annual income } & \text { IQ } \\\hline \text { Work ethic } & \begin{array} { l } \text { Pearson's } \\\text { correlation }\end{array} & 1.000 & .72 & .66 \\\hline & \text { Sig. (2-tail) } & . & .001 & .000 \\\hline & \text { N } & 550 & 550 & 550 \\\hline \text { Annual income } & \begin{array} { l } \text { Pearsor's } \\\text { correlation }\end{array} & .72 & 1.000 & .47 \\\hline & \text { Sig. (2-tail) } & .000 & . & .03 \\\hline & \text { N } & 550 & 550 & 550 \\\hline \text { IQ } & \begin{array} { l } \text { Pearson's } \\\text { correlation }\end{array} & .66 & .47 & 1.000 \\\hline & \text { Sig. (2-tail) } & .000 & .03 & . \\\hline & \text { N } & 550 & 550 & 550 \\\hline\end{array}$$

• A)Work ethic and annual income
• B)Work ethic and IQ
• C)Annual income and IQ
• D)None of the correlations are significant

---

Definitions:

Interest Rate Risk Premium

The extra return investors demand for holding an interest-bearing asset, compensating them for the risk of interest rate fluctuations.

Coupon Rate

The annual interest rate paid by a bond expressed as a percentage of the bond's face value.

YTM

Yield to Maturity, the total return anticipated on a bond if held until it matures.

Premium Bonds

Bonds sold for more than their face value due to offering interest rates higher than the current market average.