What Are "Outliers" and What Effect Does Their Presence Have

question 48

Essay

What are "outliers" and what effect does their presence have when using regression analysis for cost estimation?

---

Definitions:

Derivatives Markets

Markets where financial instruments, whose value is derived from other assets, are traded. These include futures, options, and swaps.

Transferring Risk

Shifting potential financial loss to another party through mechanisms like insurance, hedging, or outsourcing, to manage vulnerability to risk.

Investing

The process of distributing funds or resources with the aim of earning a return or profit.

Interest Income

Income earned from deposit accounts or investments that pay interest, such as bonds and savings accounts.