Kenneth McCoin, CFA, is a fairly tough interviewer. Last year, he handed each job applicant a sheet of paper with the information in the following table, and he then asked several questions about regression analysis. Some of McCoin's questions, along with a sample of the answers he received to each, are given below. McCoin told the applicants that the independent variable is the ratio of net income to sales for restaurants with a market cap of more than $100 million and the dependent variable is the ratio of cash flow from operations to sales for those restaurants. Which of the choices provided is the best answer to each of McCoin's questions?
Regression Statistics
Multiple R.........................0.8623
R-squared..........................0.7436
Standard error.....................0.0213
Observations.........................24

Suppose that you deleted several of the observations that had small residual values. If you re-estimated the regression equation using this reduced sample, what would likely happen to the standard error of the estimate and the R-squared?
Standard Error of the Estimate...................R-Squared
A. Decrease..............................................Decrease
B. Decrease..............................................Increase
C. Increase................................................Decrease

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Significance F df MSS ANOVA Regression 0.029 63.81 0.029000 0.000455 22 0.010 Residual 23 Total 0.040 Coefficients Standard Error t-Statistic p-Value Intercept Slope 11.328 0.077 0.826 0.007 0.103 7.988