Use the Following Information to Answer the Question

question 19

Multiple Choice

Use the following information to answer the question. Below is the scatterplot showing the association between raw material (in tons) put into an injection molding machine each day (x) , and the amount of scrap plastic (in tons) that is collected from the machine every 4 weeks (y) . The residual plot of the data is also shown along with a QQ plot of the residuals.

-Choose the statement that best describes whether the condition for constant standard deviation does or does not hold for the linear regression model.

• A)The scatter plot shows a linear trend-- the scatter plot is not consistent with the claim of constant standard deviation.
• B)The QQ plot mostly follows a straight line-- the QQ plot is consistent with the claim of constant standard deviation.
• C)The residual plot shows no trend-- the residual plot is not consistent with the claim of constant standard deviation.
• D)The residual plot does not display a fan shape-- the residual plot is consistent with the claim of constant standard deviation.

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Definitions:

Time Value

The principle that current money has a higher value than the same amount would in the future, given its potential to earn more.

Money

A medium of exchange that is widely accepted in transactions for goods and services, acting as a unit of account, a store of value, and sometimes, a standard of deferred payment.

Compounding

A method in which an investment's worth grows over time as the returns, including both capital gains and interest, accumulate interest.

Compound Interest

The practice of charging interest on the principle amount along with the interest that has been piled up from past periods, relevant to both lending and saving scenarios.