The Numerical Value of the Coefficient of Determination R ²

question 92

Multiple Choice

The numerical value of the coefficient of determination r ²

• A) is the proportion of the variation in the dependent variable y that is explained by the best-fit linear equation.
• B) is the proportion of the variation in the independent variable x that is explained by the best-fit linear equation.
• C) indicates the direction of the relationship between the dependent variable y and the independent variable x.
• D) Both A and B are correct.
• E) A,B,and C are all correct.

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Definitions:

Shareholder Equity

The residual interest in the assets of a company after deducting liabilities, representing the net worth attributable to shareholders.

Common Stocks

Shares representing ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends and/or capital appreciation.

Retained Earnings

Represents the portion of a company's profits not distributed as dividends to shareholders but instead reinvested in the business.

Free Cash Flow

This is a financial performance measure that shows how much cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.