Which of the Following Statements Is True Regarding Regression Analysis

question 93

Multiple Choice

Which of the following statements is true regarding regression analysis?

• A) It is often less accurate than the high/low method.
• B) It is a better predictor of fixed costs than variable costs.
• C) It can not be used to predict the effect that a change in volume of production has on net income.
• D) It uses statistical methods to fit a cost line through a number of data points.

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Definitions:

Deferral Period

A set period during which payments of principal or interest on a loan are temporarily delayed.

Perpetual Scholarship

A scholarship fund that provides financial aid indefinitely, usually through an endowment that generates interest used to fund the scholarship.

Compounded Monthly

This refers to the calculation and addition of interest to the principal sum of a loan or deposit on a monthly basis.

Equal Monthly Payments

Fixed payments made every month, as in a loan or mortgage, ensuring that the loan is paid off over a specified period.