BUSINESS ADMINISTRATION
BUSINESS ANALYTICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
have values that are symmetric about the variance
|
|
|
allow more accurate modeling
|
|
|
yield biased regression estimates
|
|
|
be a hyperbolic curve
|
Detailed explanation-1: -A normally distributed error term with mean of zero would. allow more accurate modeling. When the mean value of the dependent variable is independent of variation in the independent variable, the slope of the regression line is. zero.
Detailed explanation-2: -It is constructed by graphing the sorted values of the residuals against the corresponding theoretical values from the standard normal distribution. If the error is normally distributed, the plotted points should lie close to the straight line at a 45-degree angle. Points that are far off the line might be outliers.
Detailed explanation-3: -Normality of error terms is a basic assumption in applying statistical procedures. For example in linear regression models most of the inferential procedures are based on the assumption of normality, i.e. the disturbance vector is assumed to be normally distributed.
Detailed explanation-4: -With most process modeling methods, however, inferences about the process are based on the idea that the random errors are drawn from a normal distribution. One reason this is done is because the normal distribution often describes the actual distribution of the random errors in real-world processes reasonably well.