Time remaining: 2-04:31 48. As a preliminary step in the selection of variables

Question

Time remaining: 2-04:31 48. As a preliminary step in the selection of variables to use in a The results were as follows: in a statistical-forecasting model the management accountant has calculate d the coefficient of correlation between the firm's sales and three economic indexes Index Coefficien t of Correlation 009 854 Which of the following statements indicates the best course of action for the auditor to take in the development of a forecasting model? O Drop all three indexes from further consideration because a coefficient of correlation of : 10 is necessary for a statistically significant relationship Include only indexes B and C in the model because they have the only negetive coefficients of correlation. O include only index C in the model of correlation is O Include only index A in the model because it has the only positive coefficient of correlation I because its coefficient of corelation is relatively high and therefore probably statistically signiticant while the coefficients of

Explanation / Answer

OPtion C is correct as A and B have significantly less value, we want the value near 1 or -1 for relation.

Include only index C in the model because its coefficient of correlation is relatively high and therefore probably statistically significant, while the coefficients of indexes A and B are likely to be insignificant.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.