Suppose that you plot the residuals for your sample and get
You should conclude that
A)definitely heteroskedastic.
B)likely homoskedastic.
C)possibly heteroskedastic and you would perform a formal test for heteroskedasticity.
D)possibly homoskedastic and you would perform a correction for homoskedasticity.

Question

Suppose that you plot the residuals for your sample and get 
You should conclude that
A)definitely heteroskedastic. 
B)likely homoskedastic. 
C)possibly heteroskedastic and you would perform a formal test for heteroskedasticity. 
D)possibly homoskedastic and you would perform a correction for homoskedasticity.

Quizplus · Accepted Answer

The plot of residuals alone cannot definitively determine whether the data is heteroskedastic or homoskedastic. The plot simply suggests that heteroskedasticity may be present and a formal test should be performed to confirm or refute this possibility. Therefore, option C is the best choice.

Suppose That You Plot the Residuals for Your Sample and Get