Which of the Following Statements Is True with Respect to a Simple

question 23

Multiple Choice

Which of the following statements is true with respect to a simple linear regression model?

• A) The percent of variation in the dependent variable that is explained by the regression model is equal to the square of the correlation coefficient between the x and y variables.
• B) If the correlation coefficient between the x and y variables is negative, the sign on the regression slope coefficient will also be negative.
• C) If the correlation between the dependent and the independent variable is determined to be significant, the regression model for y given x will also be significant.
• D) All of the above are true.

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Definitions:

Straight-line Method

A depreciation method that allocates an equal amount of the asset's cost to each year of its useful life.

Market Rate

The prevailing interest rate available in the overall financial market for securities or loans of a similar risk and maturity profile.

Annual Interest

The total amount of interest payable on a loan, bond, or other financial instrument over the course of a year.

Market Rate

The current interest rate offered in the market for instruments with similar risk and maturity levels.