The Sum of Squared Errors (SSE)of a Least Squares Regression

question 117

True/False

The sum of squared errors (SSE)of a least squares regression model decreases when new terms are
added to the model.

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Definitions:

Basic Earnings Per Share

A calculation that shows a company's profitability per share of stock by dividing net income by the weighted average number of common shares outstanding.

Weighted Average

Weighted average is a calculation that takes into account the varying degrees of importance of the numbers in a data set, used in accounting for inventory cost.

Accounting Estimates

Approximations made in financial accounting to assign values to transactions or events that cannot be measured precisely, often due to uncertainty or future conditions.

Price-Earnings Ratio

A measure used in financial analysis to evaluate a company's current share price relative to its per-share earnings, indicating how much investors are willing to pay for a dollar of earnings.