DEFINITION of 'Linear Relationship'
A statistical term used to describe the relationship between a variable and a constant. Linear relationships can be expressed in a graphical format where the variable and the constant are connected via a straight line or in a mathematical format where the independent variable is multiplied by the slope coefficient, added by a constant, which determines the dependent variable.
INVESTOPEDIA EXPLAINS 'Linear Relationship'
For example, assume that the independent variable is the size of a house (as measured by square footage), determines the market price of a home (the dependent variable), when it is multiplied by the slope coefficient of 207.65 and is then added to the constant term $10,500. If a home's square footage is 1,250 then the market value the home is $270,062.50. Graphically, and mathematically:
In this example, as the size of the house increases, the market value of the house increases in a linear fashion.

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A negative correlation coefficient means that, for any two variables X and Y, an increase in X is associated with a decrease ... Read Full Answer >> 
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The correlation coefficient measures the robustness of the relationship between two variables. Pearson's correlation coefficient ... Read Full Answer >> 
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The interpretation of a stock chart can vary among different traders depending on the type of price scale used when viewing ... Read Full Answer >> 
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The cost of capital refers to the actual cost of financing business activity through either debt or equity capital. The discount ... Read Full Answer >> 
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In economics and commercial law, the HerfindahlHirschman Index (HHI) is a widely used measure that indicates the amount ... Read Full Answer >> 
What does the rule of 70 indicate about a country's future economic growth?
The rule of 70 could be used to indicate the approximate number of years that it would take a company's economic growth to ... Read Full Answer >>

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