Errors-In-Variables Bias

question 61

Multiple Choice

Errors-in-variables bias

• A)is only a problem in small samples.
• B)arises from error in the measurement of the independent variable.
• C)becomes larger as the variance in the explanatory variable increases relative to the error variance.
• D)is particularly severe when the source is an error in the measurement of the dependent variable.

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Definitions:

Discount Rate

In DCF analysis, this is the rate used to ascertain the present value of forthcoming cash flows.

Gear Ratio

The ratio between the rates at which the last and first gears in a series turn, affecting the vehicle's performance and fuel efficiency.

Reduction Range

A gearset or mechanism designed to reduce the input speed to a lower output speed, increasing torque in applications like vehicle transmissions.

Idle Rpm

The rotational speed of an engine (in revolutions per minute) when it is idling, or running without any load or acceleration.