In a multiple regression model, the standard deviation of the error variable $\varepsilon$ is assumed to be:
A) constant for all values of the independent variables.
B) constant for all values of the dependent variable.
C) 1.0.
D) None of these choices are correct.

Question

Quizplus · Accepted Answer

In a multiple regression model, the assumption is that the standard deviation of the error variable is constant for all values of the independent variables. This is known as homoscedasticity. If the standard deviation of the error variable varies for different values of the independent variables, this is known as heteroscedasticity.

In a Multiple Regression Model, the Standard Deviation of the Error