Which of the following is NOT an advantage of the method of least squares over the high-low method?
A)A statistical method is used to mathematically derive the cost function.
B)Only two points are used to develop the cost function.
C)The squared differences between actual observations and the line (cost function)are minimized.
D)All the observations have an effect on the cost function.

Question

Quizplus · Accepted Answer

The high-low method only uses two points (high and low) to estimate the cost function, which could result in a less accurate estimate. On the other hand, the method of least squares uses all available observations to derive the cost function and minimize the squared differences between the actual observations and the line (cost function). This results in a more statistically sound and accurate estimate of the cost function.

Which of the Following Is NOT an Advantage of the Method