A Regression Analysis of Company Profits and the Amount of Money

question 24

Multiple Choice

A regression analysis of company profits and the amount of money the company spent on advertising produced a $\mathrm { R } ^ { 2 } = .72$ . Which of these is true?
I. This model can correctly predict the profit for $72 \%$ of companies.
II. $\quad 72 \%$ of the variance in company profit can be accounted for by the model.
III. On average, companies spend about $72 \%$ of their profits on advertising.

• A) None
• B) I only
• C) II only
• D) III only
• E) I and III

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