FAST Regression Analysis 1

Question 1

What is the purpose of linear regression analysis?

Accepted Answer

To model the relationship between a dependent variable and one or more independent variables

Answer

Linear regression models the linear relationship between variables, enabling prediction and understanding of variable relationships.

Question 2

What does R-squared (R²) measure?

Accepted Answer

The proportion of variance in the dependent variable explained by the independent variables

Answer

R² indicates how well the independent variables explain the variability in the dependent variable, ranging from 0 to 1.

Question 3

What is multicollinearity?

Accepted Answer

High correlation among independent variables in a regression model

Answer

Multicollinearity occurs when independent variables are highly correlated, making it difficult to isolate individual effects.

Question 4

What is the purpose of residual analysis in regression?

Accepted Answer

To check whether the assumptions of the regression model are met

Answer

Residual analysis examines the differences between observed and predicted values to validate model assumptions.

Question 5

What assumption must be met for ordinary least squares regression?

Accepted Answer

Residuals should be normally distributed with constant variance

Answer

OLS regression assumes normality and homoscedasticity of residuals, linearity, and independence of observations.

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