A residual is a measurement of the vertical distance between a point and the regression line. It is just the discrepancy between an actual value observed and a value that was projected.

Residual plots can occasionally be used to find inconsistencies with independence presumptions. The serial correlation between the observations may be indicated through systematic patterns in the residuals.

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Solved Example: 9190-01

A typical residual plot should look like:

A. Distinct pattern

B. Random

C. Curve

D. Can be anything

Correct Answer: B

Solved Example: 9190-02

The residuals are calculated as ________ between observed and predicted value.

A. Difference

B. Sum

C. Product

D. Ratio

Correct Answer: A