Suppose that there is a perfect negative correlation between the amount of money that Jane spends and the amount of money that she has in her bank account: for every dollar that she spends, she has exactly one less dollar in her bank account (assuming no interest, fees, or credits). Thus the correlation between Jane's spending and savings can be represented as ____.
A) $r$ = -100
B) $r$ = -1.00
C) $r$ = 0.00
D) $r$ = 100

Question

Quizplus · Accepted Answer

The perfect negative correlation between Jane's spending and savings means that every time she spends a dollar, her savings decrease by a dollar. This can be represented by a correlation coefficient of -1.00, indicating a perfect negative linear relationship between the two variables. Thus, the best choice is B.

Suppose That There Is a Perfect Negative Correlation Between the Amount