What is the difference between a relative reference and an absolute reference in Excel?

The distinction between a relative reference and an absolute reference in Excel is fundamentally rooted in how the references behave when formulas are copied or moved to other cells. A relative reference adjusts itself based on the position of the cell where it is copied; for example, if a formula containing a relative reference to cell A1 is copied from cell B1 to cell B2, it will automatically update to reference A2.

In contrast, an absolute reference remains fixed regardless of where the formula is copied. For instance, if a formula contains an absolute reference to cell A1 (denoted by placing dollar signs, like $A$1), it will always point to A1 no matter where the formula is moved or copied. This functionality is crucial especially when you want to reference a specific cell consistently, such as using a constant value in calculations across multiple rows.

The other options do not accurately describe these concepts; while a relative reference does change when copied, the statement about an absolute reference being fixed solely in A1 is incorrect, as it can refer to any cell with the proper notation. The idea that there is no difference also contradicts the fundamental principles of referencing in Excel.