Correct Answer: (d) A, B, D, and E only
Solution:• An important assumption of the classic linear regression model is that the error terms have a conditional mean of zero. The sum of the residuals always equals zero.
• The homoskedasticity assumption states that for all observations, variance of residual is the same.
• Linear regression model assumes that error, terms are independent. This means that the error term of one observation is not influenced by the error term of another observation.
• The normality assumption requires that the residuals from the model should be normally distributed.