15. An independent variable, x, explains the variation in another variable, whic

Question

15. An independent variable, x, explains the variation in another variable, which is called the dependent variable, y a. true b. false 16. A correlation analysis allows us to measure both the strength and direction of the linear relationship between two variables. a. true b. false 17. The price of Stock A and the price of Stock B that move independently of one another are considered to be correlated, which is represented with a value that is close to zero. a. true b. false 18. Refer to question #15, this linear relationship between the independent and dependent variables does work in reverse. a. true b. false 19. Perfect negative correlation between two variables is measured with a value of a. +1 b. 0 -1 d. Neither of the above.

Explanation / Answer

15. True

Reason: x explains how y changes when x changes.

16. True

Reason: the sign of the correlation coefficient gives the direction of the relationship, whether positive or negative and the magnitude gives the strength of the relationship.

17. True

Reason: since they are independent, the value of the correlation coefficient is close to zero.

18. False

Reason: it is actually in the right direction

19. C

Reason: the magnitude will be exactly 1 and the sign will be negative, obviously.

Thanks!

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