Identify the INCORRECT statement pertaining to regression model.
A) In its first stage, the variables assumed to affect dependent variables are specified
B) In its second stage, a model is specified indicating the form of the relation between the independent variables and sales
C) The nature of the relationship between the independent variables and sales is rarely linear
D) The model is estimated by means of regression analysis, using commonly available computer programs
E) The model can be used to forecast sales

Question

Quizplus · Accepted Answer

The statement "The nature of the relationship between the independent variables and sales is rarely linear" is incorrect because in many applications of regression analysis, a linear relationship is often assumed for simplicity and ease of interpretation, although in reality, relationships can be more complex. Linear regression models, which assume a linear relationship between the independent and dependent variables, are very common and widely used in various fields for forecasting and analysis.

Identify the INCORRECT Statement Pertaining to Regression Model