Linear Regression Is Known as A(n) __________ Because It Incorporates

question 34

Short Answer

Linear regression is known as a(n) __________ because it incorporates variables or factors that might influence the quantity being forecast.

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Definitions:

Risk and Return

The principle that potential return on investment rises with an increase in risk. Higher risk is associated with the greater probability of higher return and vice versa.

Moral Hazard

The tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior.

Diversification

An investment strategy that minimizes risk by allocating assets among various financial instruments, industries, or other categories.

Market Risk

Risk that affects all companies in the stock market.