When an Explanatory Variable Is Dropped from a Multiple Regression

question 35

True/False

When an explanatory variable is dropped from a multiple regression model,the coefficient of multiple determination can increase.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, typically derived from the company's profits.

Basic Earnings

An indicator of a company's profitability, calculated before any deductions are made, representative of the raw financial performance.

Weighted Average

A calculation method where each data point is multiplied by a weight that reflects its importance or frequency before summing them up to a single average value.