Statistical Measures Used to Evaluate Regression Analysis

Question 1

Coefficient of Correlation (r)

Answer 1

measures strength of linear relationship between independent variable (x) and dependent variable (y)

Question 2

Range of (r) is

Answer 2

from -1.0 to +1.0

\+1.0 = perfect positive correlation
-1.0 = perfect negative correlation

(r) is Normally positive in accounting

Question 3

Coefficient of Determination (R squared)

Answer 3

portion of total variation in the dependent variable (y) explained by the independent variable (x)

Question 4

The Value of Coefficient of Determination (R squared)

Answer 4

is between zero and one

Question 5

The greater the R squared

Answer 5

the greater the portion of total variation in y explained by x