Based on the Residual Plot Below, You Will Conclude That

question 98

Multiple Choice

Based on the residual plot below, you will conclude that there might be a violation of which of the following assumptions.

• A)Linearity of the relationship
• B)Normality of errors
• C)Homoscedasticity
• D)Independence of errors

---

Definitions:

Inception

The beginning point or establishment of an activity, agreement, or document.

U.S.GAAP

The collection of authoritative standards and principles for financial accounting and reporting in the United States, established by the Financial Accounting Standards Board.

IFRS

International Financial Reporting Standards; a set of accounting standards developed by the International Accounting Standards Board (IASB) aiming at standardizing financial reporting across the globe.

Liquidity

A measure of a company's ability to pay off its short-term liabilities with its available cash and quick assets.