Check Assumptions / Conditions for Inferences in Regression

question 10

Multiple Choice

Check assumptions / conditions for inferences in regression.
-Based on the plot of residuals versus fitted values below, we can say that

• A) all conditions for inferences in regression are satisfied.
• B) the equal spread condition is not satisfied.
• C) the linearity condition is not satisfied.
• D) the nearly normal condition is not satisfied.
• E) the quantitative variables condition is not satisfied.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations by comparing its current assets to its current liabilities.

Liquidity Ratio

Measures a company's ability to meet its short-term obligations using its most liquid assets.

Profit Margin

A profitability ratio calculated by dividing net income by revenue, expressing the percentage of revenue that translates into net income.