Which Is True? I.Random Scatter in the Residuals Indicates a Model with High

question 8

Multiple Choice

Which is true?
I.Random scatter in the residuals indicates a model with high predictive power.
II.If two variables are very strongly associated, then the correlation between them will be near +1.0 or -1.0.
III.The higher the correlation between two variables the more likely the association is based in cause and effect.

• A)I, II, and III
• B)none
• C)I only
• D)I and II
• E)II only

---

Definitions:

Health Care

The maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of disease, illness, injury, and other physical and mental impairments in people.

Current Liability

A company's debts or obligations that are due to be paid to creditors within one year.

Note Payable

An obligation in the form of a written promissory note requiring the borrower to repay the lender a specific sum of money on demand or at a predetermined date.

Interest Payable

This is the amount of interest expense that has accumulated but not yet been paid by a company.