Final answer:
The question indicates a positive bias or overestimation because the observed Relative Risk of 4.0 is substantially higher than the true Relative Risk of 1.75.
Step-by-step explanation:
The direction of the bias in the given situation where the true Relative Risk (RR) is 1.75 and the observed/estimated RR is 4.0 indicates a positive bias or an overestimation. The term 'bias' in this context refers to the deviation of the estimated parameter (in this case, the Relative Risk) from the true value of that parameter. Since the observed RR is significantly higher than the true RR, we can say that the bias is in the direction of overestimation, likely leading to an overstatement of the association or effect in question. Thus, the bias in this situation is in the positive direction.