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Linear Relationship

A linear relationship is a lot smoother than a rocky one. Lots less drama for sure. A linear relationship exist between two sets of data when, in general, as the x-value increases by a certain amount, the y-value either increases or decreases by a fixed (but not necessarily identical) value as well.

We call the ratio of the change in y to the change in x the slope. Maybe you’ve heard of it. It’s kind of a big deal. We’re also often interested (because we’re nosy) in where the line crosses the y-axis. That’s the value of the y-intercept. If we start with a mess o’ data points that look vaguely line-ish, we can find a linear relationship between them by find the line of best fit using linear regression.

Find other enlightening terms in Shmoop Finance Genius Bar(f)