Financial Risk Manager Part 1

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Explanation:

The formula for adjusted $R^2$ ( $\bar{R}^2$ ) is: $\bar{R}^2 = 1 - \frac{SSE / (n - k - 1)}{SST / (n - 1)}$

Given the values:

$SSE = 125$
$SST = 450$
$n = 50$ (observations)
$k = 4$ (independent variables)

Plugging in the numbers: $\bar{R}^2 = 1 - \frac{125 / (50 - 4 - 1)}{450 / (50 - 1)}$ $\bar{R}^2 = 1 - \frac{125 / 45}{450 / 49}$ $\bar{R}^2 = 1 - \frac{2.7778}{9.1837}$ $\bar{R}^2 = 1 - 0.30247 = 0.69753$

The adjusted $R^2$ is approximately 0.697.

Explanation:

The formula for adjusted $R^2$ ( $\bar{R}^2$ ) is: $\bar{R}^2 = 1 - \frac{SSE / (n - k - 1)}{SST / (n - 1)}$

Given the values:

$SSE = 125$
$SST = 450$
$n = 50$ (observations)
$k = 4$ (independent variables)

The adjusted $R^2$ is approximately 0.697.

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Q.44 An analyst runs a multiple regression of a variable Y on four independent variables for 50 observations. If the sum of squared errors for the regression is 125 and the total sum of squares is 450, then what is the adjusted R2 of the regression?

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Last updated: May 21, 2026 at 13:04

0.722

0.786

0.697

0.643