Amelia used a random sample of 100 accounts receivable to estimate the relationship between Days (number of days from billing to receipt of payment) and Size (size of balance due in dollars). Her estimated regression equation was Days = 22 + 0.0047 Size with a correlation coefficient of .300. From this information we can conclude that:
A)9 percent of the variation in Days is explained by Size.
B)autocorrelation is likely to be a problem.
C)the relationship between Days and Size is significant.
D)larger accounts usually take less time to pay.

Question

Quizplus · Accepted Answer

The coefficient of determination (R^2) is found by squaring the correlation coefficient (r). In this case, R^2 = 0.300^2 = 0.09, or 9 percent. This means that 9 percent of the variation in Days is explained by the Size of the balance due.

Amelia Used a Random Sample of 100 Accounts Receivable to Estimate