Reading 11- LOS E (Part 1): Q2 following, likely, style, least

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

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

B)   expected value of the residuals is zero.

C)   variance of the residuals is constant.

D)   residuals are independently distributed.

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The correct answer was A)

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