IIA-CIA-Part3 Exam Dumps | Correlation is a term frequently used in conjunction with regression analysis and is measured by the

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Question 85/152

Correlation is a term frequently used in conjunction with regression analysis and is measured by the value of the coefficient of correlation. The best explanation of the value r is that it:

A. Is always positive.

B. Interprets variances in terms of the independent variable.

C. Ranges in size from negative infinity to positive infinity.

D. Is a measure of the relative relationship between two variables.

Correct Answer: D

The coefficient of correlation (r) measures the strength of the linear relationship between the dependent and independent variables. The magnitude of r is independent of the scales of measurement of x and y The coefficient has a range of -1 to +1. A value of zero indicates no linear relationship between the x and y variables. A value of +1 indicates a perfectly direct relationship, and a value of -1 indicates a perfectly inverse relationship.

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