The Coefficient of Determination (R²) Tells Us

question 20

Multiple Choice

The coefficient of determination (r²) tells us

• A) the proportion of total variation that is explained.
• B) that we should not partition the total variation.
• C) whether r has any significance.
• D) that the coefficient of correlation (r) is larger than 1.

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Definitions:

Subsidiary Entity

A company that is controlled or owned, either in part or fully, by another company, known as its parent company.

Parent Entity

A company that has control over one or more subsidiaries, owing enough of their stock to influence their operations.

AASB 10

An Australian Accounting Standards Board standard that sets out the principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.

Consolidated Financial Statements

Financial statements that combine the financial information of a parent company and its subsidiaries into one document.