Question

A retail analyst builds a regression model to predict weekly sales from advertising spend. The model output reports an R-squared of 0.82 and a standard error of the estimate (SEE) of $3,400. A manager asks the analyst what the SEE tells them about the model. Which interpretation is correct?

Accepted Answer

It represents the typical distance between the model's predicted sales and the actual observed sales values, expressed in dollars.

Answer

It indicates that 82% of the variation in sales is explained by advertising spend.

Answer

It is the average dollar amount by which sales increase for each additional dollar of advertising spend.

Answer

It measures the probability that the relationship between advertising and sales occurred by chance.