1. What are the three mains steps to conduct a correlation analysis? Which step, do you think, is the most important and which one is the most challenging to complete?

Name and describe at least five business applications for correlation analysis.
Would you expect that the returns of U.S. stocks and U.S. bonds would be correlated? Why or why not?
Would you expect that the returns of U.S. stocks and European stocks would be positively correlated? Why or why not?

Justify your answers using examples and reasoning.

2. How does a multiple regression compare with a simple linear regression?
What are the various ways to determine what variables should be included in a multiple regression equation?
Compare and contrast the following processes: forward selection, backward elimination, and stepwise selection.

Justify your answers using examples and reasoning.