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Which of the following statements is true of the coefficient of correlation?

a. If the coefficient of correlation is negative, then the two variables move together in the same direction.
b. It is the cube root of the coefficient of determination when there is one independent variable.
c. Perfect negative correlation would yield a coefficient of correlation of -1.00.
d. It is an alternative measure of the hypothesis test of cost parameters.

User Vincenth
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1 Answer

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Final answer:

The coefficient of correlation measures the strength and direction of a linear relationship between two variables. A negative correlation means the variables move in opposite directions. Perfect negative correlation would yield a coefficient of correlation of -1.00.

Step-by-step explanation:

The coefficient of correlation, also known as the correlation coefficient, measures the strength and direction of the linear relationship between two variables. The sign of the correlation coefficient indicates the direction of the relationship, with a positive correlation meaning the variables move together in the same direction and a negative correlation meaning they move in opposite directions. Therefore, statement (a) is true. The number portion of the correlation coefficient indicates the strength of the relationship, with values closer to 1 indicating a stronger relationship. The coefficient of determination, which is the square of the correlation coefficient, represents the percentage of variation in the dependent variable that can be explained by the independent variable. Therefore, statement (b) is false. Perfect negative correlation would yield a correlation coefficient of -1.00, as indicated by statement (c). Statement (d) is unrelated to the coefficient of correlation.

User Lyssa
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