If You Were Going to Develop a Scatter Plot for the Purpose

question 27

Multiple Choice

If you were going to develop a scatter plot for the purpose of determining whether one of the assumptions of the regression model is being satisfied, which of the following is true?

• A) The plot should illustrate a bell-shaped distribution to show that the residuals are normally distributed.
• B) The horizontal axis should show the fitted values for the dependent variable.
• C) The plot should illustrate a cone shaped look.
• D) The points should fall in a straight line.

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Definitions:

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Financial instruments representing ownership in a company, such as stocks.

Investment

The allocation of resources, such as time, money, or effort, in the expectation of generating an income or profit.

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A metric indicating the proportion of a company's annual dividends in relation to its share price.

Par Preferred Stock

Preferred stock with a nominal value assigned in the corporate charter, which determines the issue price and face value for dividend calculations.