In a Multiple Regression All of the Following Are True

question 31

Multiple Choice

In a multiple regression all of the following are true regarding residuals except:

• A)their sum always equals zero.
• B)they are the differences between observed and predicted values of the response variable.
• C)they may be used to detect multicollinearity.
• D)they may be used to detect heteroscedasticity.

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Definitions:

Insurance Companies

Businesses that provide coverage, in the form of compensation resulting from loss, damages, injury, treatment or hardship in exchange for premium payments.

Coinsurance Clause

A provision in an insurance policy that requires the policyholder to bear a portion of the risk by paying a percentage of the total claim.

Fair Market Value

The price at which property would exchange hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell.

Covered Peril

Risks or events that are specifically included as covered within an insurance policy, providing protection against losses from those events.