After taking AN300, C&A; decides to use Excel to perform a linear regression for

Question

After taking AN300, C&A; decides to use Excel to perform a linear regression forecast on the sales of HDTV and obtains the following summary output of the regression analysis. What conclusions can be drawn Regression Statistics Multiple R 0.96 R Square 0.92 Adjusted R Square 0.90 Standard Error 1.55 Observations 6 Linear regression is a good forecast method because the correlation coefficient is 0.92. Linear regression is a good forecast method because the correlation coefficient is 0.90 Linear regression is not a good forecast method because the correlation coefficient is 0.96 Linear regression is a good forecast method because the correlation coefficient is 0.96 Linear regression is a not good forecast method because the correlation coefficient is 0.9

Explanation / Answer

In the excel output for regression analysis, correlation coefficient is presented by the value called “Multiple R”. The highest value for a correlation coefficient is 1 and the lowest is 0. 1 represent a perfect relationship between the variables and 0 represents no relationship.

Based on this knowledge, we can we can identify the correct answer. That is

Linear regression is a good forecast method because the correlation coefficient is 0.96

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