In a multiple regression model, the standard deviation of the error variable is assumed to be:
A) constant for all values of the independent variables
B) constant for all values of the dependent variable
C) 1.0
D) 0
E) Not enough information is given to answer this question.

Question

In a multiple regression model, the standard deviation of the error variable  is assumed to be:
A) constant for all values of the independent variables 
B) constant for all values of the dependent variable 
C) 1.0 
D) 0 
E) Not enough information is given to answer this question.

Quizplus · Accepted Answer

In a multiple regression model, the standard deviation of the error variable (also known as the residual) is assumed to be constant for all values of the independent variables. This assumption is known as homoscedasticity. If the standard deviation of the residuals is not constant across the range of the independent variables, it is known as heteroscedasticity, which violates one of the assumptions of the multiple regression model.

In a Multiple Regression Model, the Standard Deviation of the Error