Use the following to answer questions Assuming you have two regression models and . -How can the two models be validly compared to determine the model that better represents the data y_t? A) By observing their respective R² B) By observing their respective Adjusted R² C) By estimating an encompassing or hybrid model D) All of the above

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All the options provided are valid methods to compare two models to determine which better represents the data. Option A involves observing their respective R-squared values, which measure how well the model fits the data. Option B suggests observing their respective Adjusted R-squared values, which adjust for the number of predictors in the model, providing a more accurate measure of model fit. Option C involves estimating an encompassing or hybrid model, which combines elements of both models to see if a more comprehensive model provides a better fit.

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