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In general, the value of a car decreases with age. What could be the correlation between the age and value of all cars?

Options:
Option 1: -0.7 negative
Option 2: 0.7
Option 3: -1 negative
Option 4: 1

1 Answer

6 votes

Final answer:

The most likely correlation coefficient between the age and value of all cars is -0.7, indicating a strong negative correlation, making Option 1 the correct choice for the nature of this relationship.

Step-by-step explanation:

The value of a car generally decreases as it ages. This inverse relationship between the age and value of all cars suggests a negative correlation. When examining the relationship between two variables, the correlation coefficient is a statistical measure that indicates the strength and direction of the relationship. The correlation coefficient ranges from -1 to +1, with a value of -1 indicating a perfect negative correlation, a value of +1 indicating a perfect positive correlation, and a value of 0 indicating no correlation.

A negative correlation coefficient implies that as one variable increases, the other variable decreases, and vice versa. Given that car values tend to decrease with age, we would expect a negative correlation coefficient.

Now, considering the strength of this relationship, options that indicate a strong correlation, but negative, would be more accurate.

Option 1, which is -0.7, suggests a strong inverse relationship, which is plausible for the scenario of cars depreciating over time. Options 2 (0.7) and options 4 (1) indicate a positive correlation, which does not fit the scenario where the value decreases with age. Option 3 (-1) suggests a perfect negative correlation, which is unlikely in real-world scenarios since there are other factors that can influence a car's value beyond age.

Therefore, the most likely correlation coefficient between the age and value of all cars is -0.7, making Option 1 the most appropriate choice.

User Chad Harrison
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