Question

What are the assumptions made about the random error ε in the probabilistic model y = α + βx + ε? (Select all that apply.)

--The values of ε have a normal probability distribution

--The values of ε have a n-1 degrees of freedom

--the values of ε have a mean of 1 and possibly different variances

--the values of ε have a positive correlation

--the values of ε have a Student's t probability distribution

--the values of ε are dependent in the probabilistic sense

--the values of ε have a negative correlation

--the values of ε are independent in the probabilistic sense

--the value of ε have a n degrees of freedom

--the values of ε have a mean of 0 and a common variance equal to σ²

Answer 1

ANSWER::

The assumptions for the error term in the regression model are:

i) The value of have a normal probability distribution.

ii) The values of are independent in the probabilistic sense.

iii) The values of have a mean of 0 and a common variance equal to

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