Which of the Following Is True When Testing for Normality

question 45

Multiple Choice

Which of the following is true when testing for normality of errors?

• A) Normality is verified by inspecting for a bell-shaped distribution.
• B) It is easier to evaluate normality with small sample sizes.
• C) A scatter diagram of the whole data is always used to verify normality.
• D) Errors are normally distributed when the scatter diagram shows a straight-line distribution.

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Definitions:

Cost of Living

An economic concept that estimates the amount needed to cover basic expenses in a particular place and time period.

Future Income

Expected earnings or revenue streams in the coming periods, often factored into financial planning and investment decisions.

Credit Cards

Financial instruments issued by banks and other financial institutions that allow users to borrow funds to pay for goods and services with the promise to repay the borrowed amount along with possible interest.

M1

A category of the money supply that includes all physical money like coins and currency along with demand deposits and other liquid assets held by the central bank.