For which the following scenarios is the Adjusted r-squared most likely to differ from the regular r-squared?
A) When the sample size is small and the number of independent variables is large
B) When the sample size is large and the number of independent variables is large
C) When the sample size is small and the number of independent variables is small
D) When the sample size is large and the number of independent variables is small

Question

Quizplus · Accepted Answer

When the sample size is small and the number of independent variables is large, the regular r-squared tends to overestimate the true relationship between the dependent and independent variables. The Adjusted r-squared takes into account the number of independent variables and the sample size, therefore, it is more likely to differ from the regular r-squared in this scenario.

For Which the Following Scenarios Is the Adjusted R-Squared Most