4.1.5.0 CONCLUSION
The unit concludes that under general conditions the regression model remain unchanged even if the descriptive variables have stochastic components. Provided that these components are distributed independently of the disturbance term and considering measurement errors in the descriptive and dependent variables.
4.1.6.0 TUTOR-MARKED ASSIGNMENT
In a certain industry, firms relate their stocks of finished goods, Y, to their expected annual sales,
, according to a linear relationship
Actual sales,X, differ from expected sales by a random quantity u that is distributed with mean 0 and constant variance
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