Question

Which of the following is NOT correct regarding R-squared ($R^2$) and Adjusted R-squared ($\overline{R^2}$)?

• A. $R^2$ is a scale invariant statistic.
• B. $\overline{R^2}$ is always positive.
• C. $R^2$ tends to increase if we add an additional explanatory variable.
• D. $\overline{R^2} = 1-(1-R^2) (\frac{n-1}{n-k})$ where k is the number of parameters and n is the number of observations.

Answer 1

Answer: (B)

$\overline{R^2}$ is always positive.

Answer 2

The correct option is (B): $\overline{R^2}$ is always positive.