Which of the Following Is True When Testing for Normality

question 45

Multiple Choice

Which of the following is true when testing for normality of errors?

• A) Normality is verified by inspecting for a bell-shaped distribution.
• B) It is easier to evaluate normality with small sample sizes.
• C) A scatter diagram of the whole data is always used to verify normality.
• D) Errors are normally distributed when the scatter diagram shows a straight-line distribution.

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Definitions:

Straight Line

A depreciation method where an asset loses value evenly across its useful life.

Tax Rate

The percentage at which an individual or corporation is taxed.

Market Value

The current price at which an asset or service can be bought or sold in the market.

Working Capital

Current assets minus current liabilities; a measure of a company's liquidity, operational efficiency, and short-term financial health.