A Normally Distributed Error Term with a Mean of Zero

question 29

Multiple Choice

A normally distributed error term with a mean of zero would

• A)have values that are symmetric about the variance.
• B)allow more accurate modeling.
• C)yield biased regression estimates.
• D)be a hyperbolic curve.

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Definitions:

Indirect Method

A method used in cash flow statements where net income is adjusted for items that affected reported net income but did not result in an actual cash flow.

Direct Method

A cash flow statement presentation that lists actual cash inflows and outflows from operating activities.

FASB

The Financial Accounting Standards Board (FASB) is an organization responsible for establishing and improving financial accounting standards in the United States.

Net Cash Flow

The total amount of money being transferred into and out of a business, especially as affecting liquidity.