If the Coefficient of Determination Is 0

question 2

Multiple Choice

If the coefficient of determination is 0.94, what can we say about the relationship between two variables?

• A) The strength of the relationship is 0.94.
• B) The direction of the relationship is positive.
• C) 94% of the total variation of the dependent variable is explained by the independent variable.
• D) The direction of the relationship is negative.

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Definitions:

Denominator

In mathematics, the denominator is the bottom part of a fraction that indicates how many equal parts the whole is divided into.

Working Capital Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with its current assets.

Acid-test Ratio

The acid-test ratio, also known as the quick ratio, measures a company's ability to pay its current liabilities without needing to sell inventory.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.