A regression was estimated using these variables: Y = annual value of reported bank robbery losses in all U.S. banks ($ millions), X = annual value of currency held by all U.S. banks ($ millions), n = 100 years (1912 through 2011). We would not anticipate:
A)autocorrelated residuals due to time-series data.
B)heteroscedastic residuals due to the wide variation in data magnitudes.
C)nonnormal residuals due to skewed data as bank size increases over time.
D)a negative slope because banks hold less currency when they are robbed.

Question

Quizplus · Accepted Answer

The statement about a negative slope is not accurate because there is no reason to assume that banks would hold less currency when they are robbed, and in fact, banks may hold more currency to prevent future robberies. The other options are possible concerns when analyzing a regression, but they are not specifically relevant to this example.

A Regression Was Estimated Using These Variables: Y = Annual