In a multiple regression model, the probability distribution of the error variable $\varepsilon$ is assumed to be:
A) normal.
B) non-normal.
C) positively skewed.
D) negatively skewed.

Question

Quizplus · Accepted Answer

In a multiple regression model, the error term $\varepsilon$ is typically assumed to be normally distributed to satisfy the assumptions of the classical linear regression model, which facilitates hypothesis testing and inference.

In a Multiple Regression Model, the Probability Distribution of the Error