📈 CFA Exam Prep

The coefficient of determination (R-squared) measures:

A Causation
B The proportion of variation in the dependent variable explained by the independent variable(s)
C The slope only
D Standard error

✓ Correct Answer: Option B

R² ranges from 0 to 1. R² = 0.80 means 80% of dependent variable variation is explained by the model.

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