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True or False: 1) A crucial assumption of the linear model is that the sum of...

True or False: 1) A crucial assumption of the linear model is that the sum of the residuals is 0

2)In the simple linear regression model if the R^2 is equal to one, then the linear relationship between the variable is exact and residuals are all zero

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Answer #1

1. True. The Ordinary Least Square Estimation of regression model assumes that the sum of the residuals is equal to zero.

2. True. In the simple linear regression model, if the value of R squared is equal to one, then it depicts that all the variations in the value of dependent variable are explained by independent variable and the value of unexplained variation is equal to zero which shows that the linear relationship between the variable is exact and residuals are all zero.

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