Question

Which of the following statements is correct about Assumption 4?

a. Homoskedasticity means we have equal variances in the observations of the response
b. Heteroskedasticity means we have equal variances in the observations of the response
c. If a model is better at predicting salaries of people with college degrees than people with high school diplomas, we say the model is homoskedastic
d. Homoskedasticity means we have unequal variances in the observations of the response

Answer 1

Assumption 4 in statistical analysis refers to homoskedasticity, which means that the variances in the observations of the response variable are equal across all levels of the independent variable.

Step-by-step explanation:

Assumption 4 in statistical analysis refers to the assumption of homoskedasticity. Homoskedasticity means that the variances in the observations of the response variable are equal across all levels of the independent variable.

Therefore, the correct statement about Assumption 4 is option a. Homoskedasticity means we have equal variances in the observations of the response.