A cost function with one independent variable is estimated with least squares regression.The coefficient of determination for the equation is 0.50.This statistic indicates that ________.
A) the independent variable does not explain changes in the dependent variable very well
B) the dependent variable does not explain changes in the independent variable very well
C) the cost estimates are correct 50 percent of the time
D) the cost estimates are not correct 50 percent of the time

Question

Quizplus · Accepted Answer

The coefficient of determination (R-squared) measures the proportion of variance in the dependent variable that is explained by the independent variable(s). An R-squared of 0.50 indicates that only 50% of the variation in the dependent variable is explained by the independent variable. Therefore, the independent variable does not explain changes in the dependent variable very well, and choice A is the correct answer.

A Cost Function with One Independent Variable Is Estimated with Least