Error Terms Assumption in Multiple Regression

Hard Multiple Regression Analysis Model Assumptions

In multiple regression analysis, several assumptions underlie the classical linear regression model to ensure the validity of the inference made from the model. One of these assumptions pertains specifically to the behavior of the error terms. Which of the following statements correctly describes a key assumption regarding the error terms in a multiple regression model?

The error terms should be independent and identically distributed, with a mean of zero.

The error terms should exhibit homoscedasticity, meaning they have constant variance.

The error terms can be correlated with the independent variables as long as their mean is unaffected.

Hint

Submitted2.7K

Correct1.5K

% Correct56%