Question #103 - Reading 1 Multiple Regression

Reading: Reading 1 Multiple Regression

PDF File: Reading 1 Multiple Regression.pdf

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- Using the regression model represented in Exhibit 1, what is the predicted number of housing starts for 20X7? A) 1,751,000. B) 1,394,420. C) 1,394.

Which of the following is the least appropriate statement in relation to R-square and adjusted R-square:

A. Adjusted R-square decreases when the added independent variable adds little value to the regression model

B. R-square typically increases when new independent variables are added to the regression regardless of their explanatory power

C. Adjusted R-square is a value between 0 and 1 and can be interpreted as a percentage

Adjusted R-square can be negative for a large number of independent variables that have no explanatory power. The other two statements are correct.

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