The Coefficient of Determination (R²) Decreases When an Independent Variable

question 28

True/False

The coefficient of determination (R²) decreases when an independent variable is added to a multiple regression model.

---

Definitions:

Warrants

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a security at a predetermined price before or on a specified date.

Maturity Dates

Refers to the specific date on which the principal amount of a bond, loan, or other financial instrument is scheduled to be paid in full.

Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell an asset at a pre-determined price before or at a specific time.

ESOs

Employee Stock Options, which are a form of equity compensation granted by companies to their employees as part of their remuneration package.