Which of the Following Assertions Is True About the Regression

question 27

Multiple Choice

Which of the following assertions is true about the regression line?

• A) The regression line is also called the least cubes line and is found minimizing the sum of the cubes of the residuals.
• B) It is found minimizing the sum of the residuals squared, but-even though it would be unnecessarily complicated-it could also be found minimizing the sum of the residuals cubed.
• C) Depending on the data, some regression lines could have only positive residuals.
• D) Depending on the data, some regression lines could have all residuals equal to zero.
• E) Depending on the data, some regression lines could have only negative residuals.

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Definitions:

Securitization Entity

A structured finance process that involves pooling various financial assets to create new securities, which are then sold to investors.

Legally Distinct

Refers to entities or organizations that are recognized as separate legal entities under the law, each with its own legal rights and obligations.

Factor With Recourse

An arrangement where a business sells its receivables to a factor but remains liable if the debts sold are not collected.

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Recourse obligation refers to a debt or liability for which the borrower is personally responsible, meaning the lender can pursue the borrower's other assets if the primary assets securing the loan fail to satisfy the debt.