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?
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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