Reading 11- LOS A (Part 1): Q4 2008, following, regarding, statements, class

cfaedu

4.Which of the following statements regarding the coefficient of determination is least accurate? The coefficient of determination:

A)   is the percentage of the total variation in the dependent variable that is explained by the independent variable.

B)   increases as independent variables are added to the model.

C)   may range from -1 to +1.

D)   is the ratio of explained variation to total variation.

cfaedu

The correct answer was C)

In a simple regression, the coefficient of determination is calculated as the correlation coefficient squared and ranges from 0 to +1.