Answer (A) is correct . The coefficient of determination (r 2 ) is the square of the coefficient of correlation (r). The coefficient of determination, r 2, may be interpreted as the percent of variation in the dependent variable “explained” by the variation in the independent variable. The coefficient of correlation is an index of the amount of association between the two variables and is also known as the covariance. Here, r = 0.953, and r 2 = 0.908.
Answer (B) is incorrect because This percentage is the standard error of the regression coefficient.
Answer (C) is incorrect because This percentage is a nonsense response.
Answer (D) is incorrect because This percentage is the square root of the correct answer.
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What percentage of the variation in Alpha’s overhead costs is explained by the independent variable?
