In Regression Analysis, Which of the Following Assumptions Is Not

question 47

Multiple Choice

In regression analysis, which of the following assumptions is not true about the error term ε?

• A) The expected value of the error term is one.
• B) The variance of the error term is the same for all values of x.
• C) The values of the error term are independent.
• D) The error term is normally distributed.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

Cash Dividends

The distribution of profits by a corporation to its shareholders in the form of cash.

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activities into operating, investing, and financing activities.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset from the time it was put into use to the current date.