Answered: Recall that the assumption MLR.6 states…

Algebra & Trigonometry with Analytic Geometry

13th Edition

ISBN:9781133382119

Author:Swokowski

Publisher:Swokowski

Chapter5: Inverse, Exponential, And Logarithmic Functions

Section5.6: Exponential And Logarithmic Equations

Problem 64E

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Recall that the assumption MLR.6 states u ∼ N(0, σ2 I), i.e. the error term is normally distributed. (a) Why do we make this assumption? That is, what does this assumption allow us to do? (b) What does the Central Limit Theorem tell us? How does this help us deal with violations of this assumption?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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