Question

Prices and sizes of 100 diamonds were analyzed, and the relationship between carat (size) and price...

Prices and sizes of 100 diamonds were analyzed, and the relationship between carat (size) and price (in dollars) can be explained by the model below.

Price = -2,256 + 7,756*(carat)

The R-squared value for this model is 0.85

Eighty-five percent of the variation among diamond prices could be explained by the size (carat) of the diamond, the other 15% of variation is not explained by the size. Is this TRUE of FALSE?

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Answer #1

Solution :

Given that,

R-squared = 0.85

85% (Eighty-five percent) of the variation among diamond prices could be explained by the size (carat) of the diamond ,

the other 15% of variation is not explained by the size .

TRUE

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