The Residual Plot Below Indicates That One or More of Assumptions

question 21

Multiple Choice

The residual plot below indicates that one or more of assumptions of the linear regression model may not be met. Which of the following is a reasonable conclusion based on this residual plot? ​

• A)The residual plot clearly indicates a non-linear model would be more appropriate.
• B)There is evidence that the residuals are not normally distributed.
• C)The slope of the regression line is non-zero.
• D)The correlation between x and y is non-zero.
• E)There is evidence the residuals do not have the same variance for all x values.

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Definitions:

Store Of Value

An asset that can be saved, retrieved, and exchanged in the future without depreciating in value.

Medium Of Exchange

Anything widely accepted as a tool for payment in the exchange of goods and services.

Commodity Money

Money that takes the form of a commodity with intrinsic value

Fiat Money

Money without intrinsic value that is used as money by government decree