I the Least Squares Technique Minimizes the Sum of the Squares

question 103

Multiple Choice

i. The least squares technique minimizes the sum of the squares of the vertical distances between the actual Y values and the predicted values of Y. ii. When a regression line has a zero slope, indicating a lack of a relationship, the line is vertical to the x-axis.
iii. In regression analysis, the predicted value of Y' rarely agrees exactly with the actual Y value, i.e., we expect some prediction error.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Monthly

Pertaining to or occurring once every month.

Daily

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Inventory Column

A column in financial spreadsheets or ledgers that records the quantities and values of products a company has in stock.

Cash Payments Journal

A journal used in accounting to record all payments made by a company, including expenses and purchases.