Question

 

 5. In least squares regression, which of the following is not a required assumption about the error term ε?

a. The expected value of the error term is one. 

b. The variance of the error term is the same for all values of x. 

c. The values of the error term are independent. 

d. The error term is normally distributed. 

 

7. Larger values of r²(R²) imply that the observations are more closely grouped about the 

a. Average value of the independent variables 

b. Average value of the dependent variable 

c. Least squares line 

d. Origin

 

 8. What is the number of degrees of freedom for a simple bivariate linear regression with 20 observations? 

a. 20 b. 22 c. 18 d. 2

Answer 1

5)

Option (a) is correct option.

Reason: option a) is incorrect as assumption because actually it is an assumption that summation of errors should be equal to 0, then it is incorrect to take assumptions as the expected value of errors is 1.

6)

Option (b) is correct option.

Reason: R² (coefficient of determination) explains the the variability among the dataset. Larger coefficient of determination means the observed values are more closer to the average value of dependent variables.

7)

Option (c) is correct option.

Reason: No. of degrees of freedom would be calculated as (N-2)= (20-2)= 18