Consider the following results of a multiple regression model of dollar price of
ID: 2800714 • Letter: C
Question
Consider the following results of a multiple regression model of dollar price of unleaded gas (dependent variable) and a set of independent variables: price of crude oil, value of S&P500, price U.S. Dollars against Euros, personal disposal income (in million of dollars) : Coefficient t-statistics Intercept 0.5871 68.90 Crude Oil 0.0651 32.89 S&P 500 -0.0020 18.09 Price of $ -0.0415 14.20 PDI 0.0001 17.32 R-Square = 97% What is the interpretation of R-Square? 97% of the movement in unleaded gas price can be explained by this forecasting model. the sum of squared residuals is close to 97%. 97% of the movement in unleaded gas price can be explained by changes in crude oil prices. 97% of the time this forecasting model will correctly predict the price of unleaded gas. 5 points Save Answer
Explanation / Answer
R-Square = 97%
What is the interpretation of R-Square?
R-Square denotes the strength of a linear relationship. it tells us that 97% of the movement in unleaded gas price can be explained by this forecasting model. only 03% of the movement is based on those factors which are not included in the model.
Intercept 0.5871 68.90 Crude Oil 0.0651 32.89 S&P 500 -0.0020 18.09 Price of $ -0.0415 14.20 PDI 0.0001 17.32Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.