aianjie

 

7、Which of the following is least likely an assumption of a simple regression?

A) The variance of the error term is one.

B) The error term is normally distributed. 

C) The expected value of the error term is zero. 

D) There is a linear relationship between dependent and independent variables.

aianjie

 

3、Which of the following is least likely an assumption of linear regression analysis?

A) The error term is normally distributed.

B) The Y values are all less than 3 standard deviations from the regression line.

C) The X values are uncorrelated with the error terms.

D) The expected value of the residuals is zero.

aianjie

 

The correct answer is B

In a normal distribution, approximately 99%, but not necessarily all, of the observations are within 3 standard deviations of the regression line.

aianjie

 

4、Which of the following statements about linear regression analysis is most accurate?

A) The coefficient of determination is defined as the strength of the linear relationship between two variables.

B) A perfectly negative correlation can be depicted by a correlation coefficient of +1.

C) An assumption of linear regression is that the residuals are independently distributed.

D) When there is a strong relationship between two variables we can conclude that a change in one will cause a change in the other.

aianjie

 

The correct answer is C

A perfectly negative correlation can be depicted by a correlation coefficient of -1. Even when there is a strong relationship between two variables, we cannot conclude that a causal relationship exists. The coefficient of determination is defined as the percentage of total variation in the dependent variable explained by the independent variable.

aianjie

 

The correct answer is C

The assumption is that the independent variable is uncorrelated with the residuals.

aianjie

 

2、Which of the following is least likely an assumption of linear regression? The:

A) expected value of the residuals is zero.

B) variance of the residuals is constant.

C) residuals are mean reverting; that is, they tend towards zero over time.

D) residuals are independently distributed.

aianjie

 

The correct answer is C

The assumptions regarding the residuals are that the residuals have a constant variance, have a mean of zero, and are independently distributed.