What is your assessment of the model?

Refer to the exhibit.

You have run a linear regression model against your data, and have plotted true outcome versus predicted outcome. The R-squared of your model is 0.75.

What is your assessment of the model?
A . The R-squared may be biased upwards by the extreme-valued outcomes. Remove them and refit to get a better idea of the model’s quality over typical data.
B . The R-squared is good. The model should perform well.
C . The extreme-valued outliers may negatively affect the model’s performance. Remove them to see if the R-squared improves over typical data.
D . The observations seem to come from two different populations, but this model fits them both equally well.

View Answer

Answer: A