Ohio Assessments for Educators (OAE) Mathematics Practice Exam

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What does the correlation coefficient indicate regarding two variables?

It shows the average of the data set.
It measures how strong the relationship is between the two variables.
It reflects the frequency distribution of a variable.
It indicates the mode of the data set.

The correct answer is: It measures how strong the relationship is between the two variables.

The correlation coefficient is a statistical measure that quantifies the strength and direction of the relationship between two variables. When the correlation coefficient is calculated, it yields a value between -1 and 1. A value closer to 1 indicates a strong positive relationship, meaning that as one variable increases, the other variable also tends to increase. Conversely, a value closer to -1 indicates a strong negative relationship, where an increase in one variable is associated with a decrease in the other. A value around 0 suggests little to no linear relationship between the variables. This measure is crucial in various fields such as psychology, finance, and health sciences to understand how variables interact with each other, enabling researchers and analysts to make informed predictions and decisions based on observed data relationships. Understanding the strength of these relationships can help in assessing risk, determining causality, or developing strategies based on variable interactions.