A Manager Uses Regression to Express Sales as a Function

question 97

Multiple Choice

A manager uses regression to express sales as a function of advertising expenditures (X₁) ,and per capita income (X₂) in your sales area.The following multiple linear regression equation is developed: Y = 10 + .51X₁ + .45X_2. The coefficient of determination is.96.Determine which of the following conclusions is valid regarding the coefficient of determination:

• A)More analysis is needed.The coefficient of determination leaves much unexplained.
• B)The regression line fits the data used in the sample very well.There is a strong indication of the relationship of the two variables with sales.
• C)The coefficient of determination is positive because the constant term is positive.
• D)The coefficient of determination should always be greater than one.

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