In Conducting a Multiple Linear Regression Analysis,an R² Value of 0.46

question 27

Essay

In conducting a multiple linear regression analysis,an R² value of 0.46 is obtained.An extra variable is added and R² improves to 0.52.The analyst conducting the regression analysis concludes that this is a meaningful increase in R² and determines that the latter model is an appropriate model to be used.Is this decision justified?

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Definitions:

Borrowing

The act of obtaining funds from another party, often a financial institution, with a promise to repay the principal amount along with interest or other charges over a period.

All Equity

A financial structure where a company is financed entirely through equity without any debt.

Repurchase Shares

involves a company buying back its own shares from the marketplace, which can reduce the number of outstanding shares and potentially increase the value of remaining shares.

Borrow

The act of receiving funds from a lender under the agreement to return the principal amount plus interest or other charges.