Question #59 - Reading 1 Multiple Regression

Reading: Reading 1 Multiple Regression

PDF File: Reading 1 Multiple Regression.pdf

Page: 27

Status: Unattempted

Correct Answer: B

Shared Context

- With respect to testing the validity of the model's results, Williams may wish to perform: A) both a Breusch-Godfrey test and a Breusch-Pagan test. B) a Breusch-Pagan test, but not Breusch-Godfrey. C) a Breusch-Godfrey test, but not a Breusch-Pagan test.

Question

When Williams ran the model, the computer said the R2 is 0.233. She examines the other output and concludes that this is the:

Answer Choices:

A. adjusted R2 value

B. neither the unadjusted nor adjusted R2 value, nor the coefficient of correlation

C. unadjusted R2 value

Explanation

This can be answered by recognizing that the unadjusted R-square is (335.2 / 941.6) = 0.356. Thus, the reported value must be the adjusted R2. To verify this we see that the adjusted R-squared is: 1− ((26 − 1) / (26 − 4 − 1)) × (1 − 0.356) = 0.233. Note that whenever there is more than one independent variable, the adjusted R2 will always be less than R2.

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