An economist collected the monthly returns for KDL's portfolio and a diversified stock index. The data collected are shown below:

The economist calculated the correlation between the two returns and found it to be 0.996. The regression results with the KDL return as the dependent variable and the index return as the independent variable are given as follows:
Regression Statistics
Multiple R.......................0.996
R-squared.......................0.992
Standard error..................2.861
Observations...................6

When reviewing the results, Andrea Fusilier suspected that they were unreliable. She found that the returns for Month 2 should have been 7.21 percent and 6.49 percent, instead of the large values shown in the first table. Correcting these values resulted in a revised correlation of 0.824 and the revised regression results shown as follows:
Regression Statistics
Multiple R.............................0.824
R-squared.............................0.678
Standard error.............................2.062
Observations...............................6

Explain how the bad data affected the results.

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Month Portfolio Return (%) Index Return (%) -0.59 64.90 1 1.11 72.10 4.81 5.12 1.68 1.01 -4.97 -1.72 4.06 -2.06 6. df Significance F ANOVA MSS Regression 1 4101.62 4101.62 500.79 32.76 4134.38 8.19 Residual 5 Total