Question

question 49
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what does it mean if residuals in a regression model show a pattern?
o a. model is underfitting
o b. model is correctly specified
o c. model has some missing variables or incorrect assumptions
o d. model is overfitting
o e. none of these

Explanation:

In regression analysis, residuals represent the differences between the observed and predicted values. If residuals show a pattern, it indicates that the model is not capturing all the relevant relationships. This can be due to missing variables (variables that should be included in the model but are not) or incorrect assumptions (such as linearity assumption when the relationship is non - linear).
Underfitting (a) is more about the model being too simple to capture the data's complexity in general, not specifically related to residual patterns. A correctly specified model (b) would have residuals that are randomly distributed (no pattern). Overfitting (d) is about the model fitting the training data too closely (including noise) and not about residual patterns in the sense of model misspecification.

Answer:

C. Model has some missing variables or incorrect assumptions