DA0-002 Data Analysis Practice Question
An analyst calculates a Pearson correlation coefficient of -0.8 between advertising spend and customer churn rate. Which interpretation is correct?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Increasing advertising spend is associated with decreasing churn rate.
Negative correlation means as one variable increases, the other decreases; strength is high (close to -1).
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
There is a weak positive relationship.
Why it's wrong here
Correlation is negative and strong.
- ✗
Advertising spend causes churn to decrease.
Why it's wrong here
Correlation does not imply causation.
- ✗
64% of the variance in churn is explained by spend.
Why it's wrong here
R² = 0.64, but that's for linear regression; correlation squared = 0.64, but interpretation is about variance explained only if regression is used.
- ✓
Increasing advertising spend is associated with decreasing churn rate.
Why this is correct
Negative correlation: one goes up, other down.
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