Suppose That the Following Model Was Fit to a Set $$E ( y ) = \beta _ { 0 } + \beta _ { 1 } x _ { 1 } + \beta _ { 2 } x _ { 2 }$$

question 14

Multiple Choice

Suppose that the following model was fit to a set of data.
$$E ( y ) = \beta _ { 0 } + \beta _ { 1 } x _ { 1 } + \beta _ { 2 } x _ { 2 }$$
The corresponding plot if residuals against predicted values $\hat { y }$ is shown. Interpret the plot.

• A) The residuals appear to be randomly scattered so that no model modifications are necessary.
• B) It appears that the variance ofε is not constant.
• C) It appears that the data contain an outlier.
• D) It appears that a quadratic model would be a better fit.

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