Goodness-Of-Fit Measures How Well the Predicted Values in a Cost

question 19

Multiple Choice

Goodness-of-fit measures how well the predicted values in a cost estimating equation ________.

• A) match the cost driver
• B) determine the level of activity
• C) match the actual cost observations
• D) rely on the independent variable

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Definitions:

Compounded Semi-Annually

Interest calculation method where the interest is added to the principal sum twice a year, causing the interest to earn interest.

Strip Bond

A type of bond where the principal and regular coupon payments have been separated and are sold individually as zero-coupon bonds.

Interest

The cost of borrowing money, typically expressed as a percentage of the borrowed amount, paid by the borrower to the lender.

Effective Rate

The actual interest rate of an investment or loan when the compounding frequency is accounted for, giving a true reflection of the cost or yield.