How would we interpret the coefficient of determination R²? A)Approximately 46% of the time,the dollar value of the loans is determined by these three variables. B)Approximately 46% of the observations lie within 1 standard deviation of the regression line. C)Approximately 46% of the variation in the total dollar amount of loans can be explained by the variation in these three variables. D)Approximately 46% of the total dollar amount of loans is explained by these three variables.

Question

Quizplus · Accepted Answer

The coefficient of determination, denoted by R-squared (RS), measures the proportion of variation in the dependent variable (total dollar amount of loans) that is explained by the independent variables (R²). Therefore, choice C, which states that approximately 46% of the variation in the total dollar amount of loans can be explained by the variation in these three variables, is the best interpretation of the coefficient of determination. Choices A, B, and D are either incorrect or incomplete interpretations.

How Would We Interpret the Coefficient of Determination R2

How Would We Interpret the Coefficient of Determination R²