In Linear Regression, We Fit the Least Squares Line to a Set

question 67

Multiple Choice

In linear regression, we fit the least squares line to a set of values (or points on a scatterplot) . The distance from the line to a point is called the:

• A) fitted value
• B) residual
• C) correlation
• D) covariance
• E) estimated value

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Definitions:

FIFO

First-In, First-Out, an inventory method where the oldest items in stock are sold first.

LIFO

Last-In, First-Out, an inventory valuation method where the most recently produced or purchased items are sold first, used for cost of goods sold calculation.

Pretax Income

The amount of income earned by a business before taxes have been deducted.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.