IAI Actuarial Core Principles · Actuarial Statistics · Linear regression models
Data (x, y): (1, 3), (2, 5), (3, 7), (4, 9) are fitted by least squares as y = a + bx. What is the residual sum of squares?
The points lie exactly on the line y = 1 + 2x, so least squares reproduces it and all residuals are zero. The residual sum of squares is therefore 0.
- A0Correct
- B1
- C2
- D4
- 0.5
Explanation
All points satisfy y = 1 + 2x exactly, so the least squares line is this line. Every residual is zero and the RSS is 0.
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