Which of the following assumptions concerning the probability distribution of the random error term is stated incorrectly?
A) The variance of the distribution increases as X increases.
B) The distribution is normal.
C) The errors are independent.
D) The mean of the distribution is 0.

Question

Quizplus · Accepted Answer

This assumption is incorrect as it implies that the variability of the response variable also increases as X increases, which may not always be the case. The correct assumption is that the variance of the error term is constant across all values of X.

Which of the Following Assumptions Concerning the Probability Distribution of the Random