Explain the coefficient of determination.
The market model linking the rate of return of stock XYZ (denoted RXYZ) to the rate of return of a broader index of the stock market (denoted RM) is reported as-
RXYZ = 4.46 + 0.304RM
|
Coefficient
|
Standard Error
|
|
4.460
|
3.0400
|
|
0.304
|
0.3243
|
|
Analysis of Variance
|
|
|
|
Source
|
DF
|
Sum of Squares
|
|
Regression
|
?
|
141.9
|
|
Residual
|
?
|
3718.9
|
|
Total
|
24
|
?
|
Find out what is the coefficient of determination?
(Hint- You must complete the table to answer the question.)
- 0.0368
- 0.0381
- 0.8776
- 0.9618