Exhibit 15-7
A regression model involving 4 independent variables and a sample of 15 periods resulted in the following sum of squares.
SSR = 165
SSE = 60
-Refer to Exhibit 15-7. The coefficient of determination is
A)0.3636
B)0.7333
C)0.275
D)0.5

Question

Quizplus · Accepted Answer

The coefficient of determination (R-squared) is SSR/SST, where SST is the total sum of squares. Since SST = SSR + SSE, we can calculate SST as 165 + 60 = 225. Therefore, R-squared = SSR/SST = 165/225 = 0.7333. The best choice is B, which is the correct value of the coefficient of determination.

Exhibit 15-7 A Regression Model Involving 4 Independent Variables and a Sample