What is the correct interpretation of the coefficient of determination R²? A)The sales price equals 53% of these three variables. B)47% of the variation in sales prices can be determined by the variation in these three variables. C)The sales price equals 47% of these three variables. D)The probability that the sample values will lie on the regression line is 0.47.

Question

Quizplus · Accepted Answer

The coefficient of determination (R-squared) measures the proportion of variability in the dependent variable (sales prices in this case) that can be explained by the independent variables (R² in this case). Therefore, choice B is the correct interpretation, which states that 47% of the variation in sales prices can be determined by the variation in these three variables. The other choices are incorrect interpretations of the coefficient of determination.

What Is the Correct Interpretation of the Coefficient of Determination