In Regression Terms What Does "Best Fit" Mean

question 41

Multiple Choice

In regression terms what does "best fit" mean?

• A)The estimated parameters,b₀ and b₁,are minimized.
• B)The estimated parameters,b₀ and b₁,are linear.
• C)The error terms are as small as possible.
• D)The largest error term is as small as possible.

---

Definitions:

Cash Reserves

Funds that a company or individual keeps on hand to meet short-term and emergency funding needs.

Inventory Turnover

A calculation representing the turnover rate of a company's stock, showing how often it's sold and replaced within a given period.

Current Ratio

A liquidity measure that evaluates a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.

Fixed Asset Turnover

A financial ratio that measures a company’s ability to generate sales from its fixed-asset investments - such as property, plant, and equipment.