All of the Following Are Assumptions of the Error Terms

question 66

Multiple Choice

All of the following are assumptions of the error terms in the simple linear regression model except:

• A)Errors are normally distributed.
• B)Error terms have a mean of zero.
• C)Error terms have a constant variance.
• D)Error terms are dependent on each other.

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Definitions:

Parent

In corporate finance, refers to a company that holds a controlling interest in one or more subsidiary companies.

Subsidiary

A corporation that is governed by another corporation, referred to as the parent company, by possessing over 50% of its voting shares.

In-Process Research and Development

Expenditures on research and development activities that are not yet complete, which may be capitalized as an intangible asset.

Indefinite-Lived Asset

An asset that is not anticipated to be consumed or used up and does not have a definable useful life, such as certain trademarks or goodwill.