Perfectly correlated indicators are not useful in an index.

Name: Perfectly correlated indicators are not useful in an index.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If the indicators in an index are perfectly correlated, they provide duplicate information and do not offer any additional insights or value to the index. It is important to include diverse indicators that provide unique information in order to create an index that accurately reflects the underlying concept it represents.

Perfectly Correlated Indicators Are Not Useful in an Index