The Major Flaw of the Linear Probability Model Is That

question 16

Multiple Choice

The major flaw of the linear probability model is that

• A)the actuals can only be 0 and 1, but the predicted are almost always different from that.
• B)the regression R² cannot be used as a measure of fit.
• C)people do not always make clear-cut decisions.
• D)the predicted values can lie above 1 and below 0.

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