The Following Model Was Created to Show the Association Between

question 21

Multiple Choice

The following model was created to show the association between the number of massages received per month and self- predicted stress level: Stress level = 10 - 0.02(number of massages per month) . The coefficient of determination for the model is 0.066 or 6.6%. Choose the true statement regarding this model.

• A)The model shows that getting even one massage a month will decrease your stress level.
• B)The model shows that there is a negative association between stress level and number of monthly massages, but the relatively small coefficient of determination suggests that very little of the variation is explained by the model, so the model is probably not very good at predicting stress level.
• C)The model shows that on average a person getting no massages will always have a stress level of 10.
• D)All of these are true statements.

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Definitions:

Opportunity Cost

The cost of an alternative that must be forgone in order to pursue a certain action, essentially the benefits you could have received by taking another course of action.

EVA

Economic Value Added, a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit.

Operating Income

This metric reflects the profits earned from a company's core business operations, excluding non-operating income and expenses.

Cost Of Capital

The essential return rate an enterprise has to produce on its investment activities to sustain its market assessment and appeal to investors.