In General,a Larger R² Tends to Suggest That

question 22

Multiple Choice

In general,a larger R² tends to suggest that

• A)the estimated sample regression function explains a greater percentage of the total variation in y.
• B)the estimated sample regression function is more accurate.
• C)the estimated sample regression function explains a greater percentage of the explained variation in y.
• D)the estimated slope coefficient is more likely to equal the population slope coefficient.

---

Definitions:

Exchange Rate

The price at which one currency can be exchanged for another currency.

Uncovered Interest Rate Parity

A condition in which the difference in interest rates between two countries equals the expected change in exchange rates between their currencies, without hedging.

Spot Rate

The current price in the marketplace at which a given asset, such as a currency, commodity, or security, can be bought or sold for immediate delivery.

Nominal Risk-free Return

The return on an investment without adjusting for inflation, representing the interest rate on a risk-free security.