If a regression analysis shows an R factor of .85 exists,it is safe to assume:
A)a strong positive relationship between cost and volume.
B)a strong negative relationship between cost and volume.
C)no relationship between cost and volume.
D)a perfect positive relationship between cost and volume .

Question

Quizplus · Accepted Answer

An R factor, also known as the correlation coefficient, measures the strength and direction of the linear relationship between two variables. A correlation coefficient of 0 indicates no relationship, while a value of 1 or -1 indicates a perfect positive or negative relationship, respectively. An R factor of .85 indicates a strong positive relationship between cost and volume, but not a perfect one, as some variability may still exist in the data. Therefore, choice A is the best answer.

If a Regression Analysis Shows an R Factor of