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Reading 11- LOS A (Part 2): Q10

10.Which of the following statements about the correlation coefficient is least accurate?

A)   The correlation coefficient can vary between -1 and +1.

B)   If the regression line is flat and the observations are dispersed uniformly about the line, the correlation coefficient will be + 1.

C)   If the correlation coefficient is negative, it indicates that the regression line has a negative beta.

D)   The correlation coefficient describes the strength of the relationship between the X variable and the Y variable.

The correct answer was B)

Correlation analysis is a statistical technique used to measure the strength of the relationship between two variables. The measure of this relationship is called the coefficient of correlation. 

If the regression line is flat and the observations are dispersed uniformly about the line, there is no linear relationship between the two variables and the correlation coefficient will be zero.

All other choices are TRUE.

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