Reading 11- LOS A (Part 2): Q2 between, following, 2008, class

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2.In order to have a negative correlation between two variables, which of the following is most accurate?

A)   Either the covariance or one of the standard deviations must be negative.

B)   Both the covariance and at least one of the standard deviations must be negative.

C)   The covariance must be negative.

D)   The covariance can never be negative.

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The correct answer was C)

In order for the correlation between two variables to be negative, the covariance must be negative. (Standard deviations are always positive.)