What Statistical Technique Is Used to Make Predictions of Future

question 27

Multiple Choice

What statistical technique is used to make predictions of future outcomes based on present data?

• A) Analysis of variance
• B) Repeated measures
• C) Linear regression
• D) Correlational analysis

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Definitions:

Utility Function

An economic model that describes how consumers rank different bundles of goods according to the levels of happiness or satisfaction they provide.

Risk Neutral

A term describing an individual or entity that does not prefer or avoid risk, implying indifference to the amount of risk associated with any investment.

Risk Averse

A characteristic of individuals who prefer to avoid risk and would rather choose an option with a lower but more certain return than an option with a higher but uncertain return.

Von Neumann-Morgenstern

Pertains to a theorem used in expected utility theory, which provides an axiomatic basis for the selection of optimal choices under uncertainty.