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

Question

Quizplus · Accepted Answer

The statement that "the variance of the distribution increases as X increases" is incorrect. This violates the assumption of homoscedasticity, which states that the variance of the error term should be constant across all levels of the independent variable.

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