Correlation measures:

A Causation between variables

B The strength and direction of the linear relationship between two variables (−1 to +1)

C Only positive relationships

D Variance of one variable

✓ Correct Answer: Option B

Correlation (ρ or r): ranges from −1 (perfect negative) to +1 (perfect positive). Zero = no linear relationship.

💡 Why is B) the correct answer?

The correct answer to the question "Correlation measures:" is Option B: The strength and direction of the linear relationship between two variables (−1 to +1).

The other options — A) Causation between variables, C) Only positive relationships, D) Variance of one variable — are incorrect for this CFA Exam Prep question. As explained above: Correlation (ρ or r): ranges from −1 (perfect negative) to +1 (perfect positive). Zero = no linear relationship.

📚 About This CFA Exam Prep Practice Question

This 1-level CFA Exam Prep question from the Quantitative Methods topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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Correlation measures:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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