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Commerce · Q438

Costing

Graduate and Post Graduate · Commerce · question 438

Q438

An assumption of specification analysis states: any observation does not belong to any other observation's residual value, is classified as

A.
independence of residuals
Answer
B.
dependence of residuals
C.
independence of correlation
D.
None of the above

Answer: Option A

Solution

Answer: Option A
Solution:
An assumption of specification analysis states: any observation does not belong to any other observation's residual value, is classified as independence of residuals. These residual plots can be used to assess the quality of the regression.