What Can We Conclude If the Coefficient of Determination Is

question 77

Multiple Choice

What can we conclude if the coefficient of determination is 0.94?

• A)Strength of relationship is 0.94.
• B)Direction of relationship is positive.
• C)94% of total variation of one variable is explained by variation in the other variable.
• D)A and B are correct.

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Definitions:

Shareholder Basis

The amount invested in a company by its shareholders plus any earnings retained by the company.

Earnings and Profits

A measure used for tax purposes, representing a corporation's net income plus or minus certain tax-preferred items.

Cash Dividend

A payment made by a corporation to its shareholders, usually in cash, out of its profits or reserves.

Basis

The amount of investment in property for tax purposes, used to calculate gain or loss upon sale or disposition of the property.