- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 5. Multiple Regression
- Subject 8. Is R
^{2}Related to Statistical Significance?

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**CFA Practice Question**

Given SSE = 12, SST = 120, n = 32, k = 5, compute adjusted R

^{2}.A. 0.90

B. 0.88

C. 0.073

**Explanation:**R

^{2}= 1 - SSE/SST = 0.9.

Adjusted R

^{2}= 1 - [(32 - 1)/(32 - 5 - 1)] (1 - R

^{2}) = 0.88.

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**User Contributed Comments**
4

User |
Comment |
---|---|

yly14 |
Can't memorize the formula, just looked for the number slightly lower than R2 of 0.9 |

chriswwu |
@yly14 - agree. I did the same. |

sunday128 |
Good tip yly14 |

dariorf7 |
Is this answer correct? I get 0,78 1) (1-R^2) = 0,19 2) 1 - [(n-1)/(n-k-1)] = 1 - [(32-1)/(32-5-1)] = 1 - (32/26) 3) 1 - [(32/26)x0,19] = 0,78 Someone please can explain? |