ACCA · Question 10 · Syllabus B: Data analysis and statistical techniques
A global logistics company calculates the correlation coefficient (r) between the distance a delivery truck travels and its maintenance costs to be +0.90.
What is the coefficient of determination, and what does it signify?
Answer options:
0.90; 90% of the variation in maintenance costs is explained by the distance traveled.
0.81; 81% of the variation in maintenance costs is explained by the distance traveled.
0.81; 81% of the variation in distance traveled is caused by maintenance costs.
1.80; Maintenance costs increase by 1.80 for every mile traveled.
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