A recent study by a major financial investment company was interested in determining whether the annual percentage change in stock price for companies is linearly related to the annual percent change in profits for the company.
The following data was determined for 7 randomly selected companies:
Change Stock Price Change in Profit
8.4 4.2
9.5 5.6
13.6 11.2
-3.2 4.5
7 12.2
18.4 12
-2.1 -13.4
Based upon this sample information, what portion of variation in stock price percentage change is explained by the percent change in yearly profit?
A) Approximately 70 percent
B) Nearly 19 percent
C) About 49 percent
D) None of the above
Question 2
In a multiple regression analysis involving 15 independent variables and 200 observations, SST = 800 and SSE = 240. The adjusted coefficient of determination is
A) 0.15
B) 0.50
C) 0.66
D) 0.70
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