How Is the Significance of Regression Tested

question 83

Multiple Choice

How is the significance of regression tested?

• A)by checking the sum of the squares of the residuals for statistical significance
• B)by testing whether the slope of the independent variable is zero
• C)by testing whether the intercept term is greater than or equal to 1
• D)by checking the absolute value of the coefficient of the dependent variable

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Definitions:

Depreciation Expense

The allocated portion of the cost of a fixed asset over its useful life, recognized as an expense on the income statement.

Sales-Type Lease

A financing arrangement in leasing, where the lessor recognizes immediate sales revenue and profit on the leased asset.

Direct Financing Lease

A leasing arrangement where the lessor purchases an asset and leases it out, recognizing interest income over the lease term.

Implicit Rate

The interest rate implied in a lease arrangement, calculated based on the present value of lease payments and the asset's fair value.