Author Question: Why is it so important to understand and test the assumptions of the multiple regression model? ... (Read 101 times)

faduma · **on:** Jun 24, 2018

Why is it so important to understand and test the assumptions of the multiple regression model?

What will be an ideal response?

Question 2

An accountant who recently examined 200 accounts from a company's total of 4,000 accounts in an effort to estimate the percentage of all accounts that have incorrect journal entries is using descriptive statistical analysis to reach the conclusion.

Indicate whether the statement is true or false

xMRAZ · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

Once a model has been constructed, it can be used to learn details of the system and process being studied. In regression analysis, this may involve finding confidence intervals for the model parameters, testing hypotheses of interest, or forecasting future values of the dependent variable, given assumed values of the independent variables. It is important to recognize that inference of this sort is based on the assumption of an appropriate model specification and estimation. In general, the more severe are any specification or estimation errors, the less reliable is any inference derived from the estimated model.

Answer to Question 2

FALSE