When Are R² and Adjusted R² Equal

question 11

Multiple Choice

When are R² and adjusted R² equal?

• A)when the model is correctly specified
• B)when K = 1
• C)when the error terms are normally distributed
• D)when an unrestricted model is estimated

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Definitions:

Intangible Assets

Non-physical assets owned by a business, such as patents, copyrights, trademarks, and goodwill, that provide economic benefits.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted into cash in the short term, such as buildings, machinery, and vehicles.

Fixed Asset Account

An account on the balance sheet that reports the cost and accumulated depreciation of long-term tangible assets used in the operations of a business.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, reflecting its decrease in value over time.