b. The second model has better overall explanatory power, but a better R2 is only gained at the expense of other factors. The first model is better at explaining individual

b. The second model has better overall explanatory power, but a better R2 is only gained at the
expense of other factors. The first model is better at explaining individual coefficient estimates
than the second.
c. The second model is unambiguously better; since R2 signifies the explanatory power of the
entire model, the second model’s other results (expected signs, t-stats/p-values) are not as
important. The first model should be seen as inferior.
d. The independent variables in the first model are not statistically significant, despite what the t-
stats and p-values suggest.
Question 15
If you ran a regression using data on many different used car sales, and had selling price as
the dependent variable, the expected sign on the variable "mileage" (how many miles the car
had been driven) would be negative.
Select one:
True
False
Question 16
Question text
If you ran a regression using data on many different used car sales, and had selling price as
the dependent variable, the expected sign on the variable "sound" (a dummy variable
representing whether the car has upgraded speakers, 1 = upgraded and 0 = standard) would
be negative.
Select one:
True
False
The following are regression results where Car Price is the dependent variable:
Regression Statistics
R2=0.446
Adjusted R2=0.441
Observations = 804
Independent Variables Coefficients Standard Error t Stat P-value

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