Which of the following is True of the fundamentals of regression analysis?
A) A fundamental basis of regression analysis is the assumption of a circular relationship between the independent and dependent variables.
B) Regression uses an estimation procedure called ordinary least squares that guarantees the line it estimates will be the best fitting line.
C) The differences between actual and predicted values of the dependent variable are known as regression coefficients and are represented by b.
D) The regression coefficient is calculated by squaring errors of each dependent variable.
E) Any point that falls on the line of a regression analysis is the result of unexplained variance.

Question

Quizplus · Accepted Answer

Ordinary least squares (OLS) is a widely used regression estimation procedure that minimizes the sum of the squared differences between actual and predicted values of the dependent variable. This results in the best fitting line for the data. The assumption of a circular relationship (A), the use of regression coefficients as squared errors (C), and the interpretation of any point on the line as unexplained variance (E) are not accurate descriptions of the fundamentals of regression analysis.

Which of the Following Is True of the Fundamentals of Regression