Explain the variation in a particular dependent variable, Financial Econometrics

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Explain the variation in a particular dependent variable

Suppose that you have generated three alternative multiple regression equations to explain the variation in a particular dependent variable. The regression output for each equation can be summarized as follows:

	Equation 1 Equation 2 Equation 3
No. of Xs	4	6	9
R²	0.76	0.77	0.79
Adjusted R²	0.75	0.74	0.73

Which of these equations would you select as "best"? Explain your choice.

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Financial Econometrics: Explain the variation in a particular dependent variable

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Financial Econometrics: Explain the variation in a particular dependent variable

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