A coefficient of determination of 0.6 means that 40% of the variation in a security's return is related to factors other than the security's relationship to the market.

Question

Quizplus · Accepted Answer

The coefficient of determination (R²) of 0.6 indicates that 60% of the variation in the security's return is explained by its relationship to the market, leaving 40% unexplained by the model, attributed to other factors.

A Coefficient of Determination of 0