Which of the following statements is true about the correlation coefficient and covariance?
A) The covariance is the preferred measure of the relationship between two variables since it is generally larger than the correlation coefficient.
B) The correlation coefficient is a preferred measure of the relationship between two variables since its calculation is easier than the covariance.
C) The covariance is a standardized measure of the linear relationship between two variables.
D) The covariance and corresponding correlation coefficient are represented by different signs, one is negative while the other is positive and vice versa.
Question 2
Given a set of 25 observations, for what value of the correlation coefficient would we be able to say that there is evidence that a relationship exists between the two variables?
A) 0.40
B) 0.35
C) 0.30
D) 0.25
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