For the Same Set of Observations on a Specified Dependent

question 9

Multiple Choice

For the same set of observations on a specified dependent variable two different independent variables were used to develop two separate simple linear regression models.A portion of the results is presented below. Based on the results given above,we can conclude that:

• A)A prediction based on Model 1 is better than a prediction based on Model 2.
• B)A prediction based on Model 2 is better than a prediction based on Model 1.
• C)There is no difference in the predictive ability between Model 1 and Model 2.
• D)There is not sufficient information to determine which of the two models is superior for prediction purposes.

---

Definitions:

Subsidiary Ledger

A ledger containing individual accounts with a common characteristic.

Control Account

A general ledger account that summarizes the total amounts recorded in various subsidiary ledgers for easier and consolidated reporting.

Accounting System

A comprehensive process of collecting, recording, classifying, and summarizing financial information for business transactions.

Feedback

Measures provided to operational employees or managers on the performance of subunits of the organization. These measures are used by employees to adjust a process or a behavior to achieve goals. See management by exception.