Question

A retail analyst builds a simple linear regression to predict monthly sales revenue (in dollars) from advertising spend (in dollars). The fitted model is: Revenue = 8,500 + 4.2 × (Ad Spend). Both variables are measured in dollars and the model is statistically significant. How should the analyst interpret the slope coefficient of 4.2?

Accepted Answer

For every additional $1 spent on advertising, predicted revenue increases by $4.20 on average.

Answer

Advertising spend explains 4.2% of the variation in revenue.

Answer

When advertising spend is zero, predicted revenue is $4.20.

Answer

Revenue and advertising spend have a correlation coefficient of 4.2.