The Adjusted R² Is Adjusted for the Number of Explanatory

question 55

True/False

The adjusted R² is adjusted for the number of explanatory variables in a regression equation,and it has the same interpretation as the standard R².

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Definitions:

Average Accounting Return

A measure of the profitability of an investment, calculated as the average annual net income divided by the average investment.

Time Value

The concept in finance that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Calculation

The process of determining a numerical result based on mathematical operations or algorithms.

Average Accounting Return

A financial ratio that measures the average net income that a firm generates as a percentage of its average book value of equity.