The Most Widely Used Method of Estimating a Regression Line

question 20

Multiple Choice

The most widely used method of estimating a regression line for a data set involves selecting the line

• A) on which all data points will fall.
• B) which minimizes the sum of the vertical distances between the line and the individual data points.
• C) which minimizes the sum of the squared vertical distances between the line and the individual data points.
• D) which minimizes the sum of the absolute value of the vertical distances between the line and the individual data points.

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Definitions:

Months

Units of time used in calendars that approximate the natural period of the lunar month; usually considered to be about 30 days long.

Future Value

An asset or cash's value on a particular date in the future, matching the value of a specified amount now.

Interest Rate

The percentage of an amount of money charged for its use over a specified period.

Cash Flows

Refers to the total amount of money being transferred into and out of a business, especially affecting liquidity.