What is the correct statement about the above expression? Select one: O a. It is an R² but with a penalty for having too many data points O b. Adjusted R2 is always larger than R²
q14-
R2 measures the variation in the dependent variable that can be explained by the independent variable. For example, if R2 is 0.80, then 80% of the variation in the dependent variable will be explained by the independent variable.
Formula:
R2 = 1 - (SSE / SST)
Where
SSE is sum of squared error
SST is sum of squared total
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Adjusted R2 is the upgraded version of R2, which helps in finding how well the multiple regression fits the sample. It is always less than or equal to R2
Formula:
Adjusted R2 = 1 - [(SSE / N-K) / (SST / N-1)]
Where
SSE is the sum of squared error
SST is the sum of squared total
N is the total number of observation
K is the number of the independent variables
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