A Regression Line Minimizes the Sum of the Squared Error

question 99

Multiple Choice

A regression line minimizes the sum of the squared error values.This means that the regression line minimizes the sum of ______ from each point in the scatter point to the regression line.

• A)the squares of the distances
• B)the squares of the horizontal distances (differences in the x-coordinates)
• C)the squares of the vertical distances (differences in the x-coordinates)
• D)the squares of the horizontal distances (differences in the y-coordinates)
• E)the squares of the vertical distances (differences in the y-coordinates)

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Definitions:

Compounded Quarterly

Refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods on a quarterly basis.

Compounded Semi-Annually

Interest that is computed and added to the principal twice a year, allowing the investment to grow more rapidly.

Future Value

The value of a current asset at a specified date in the future based on an assumed rate of growth.

Deposits

Money placed into a financial institution for safekeeping, which may earn interest over time.