Module 8.6 LOS 8.f: Assumptions of a multiple or simple regression model

Multiple regression models operate under the following assumptions:

  1. A linear relationship exists between dependent and independent variables
  2. The independent variables are not random, and there is no exact linear relation between any two or more independent variable
  3. The independent variable is uncorrelated with the residual term
  4. The expected value of the residual term is zero
  5. There is a constant variance with of the residual term
  6. The residual term is independently distributed; that is, the residual term for one observation is nor correlated with that of another observation
  7. The residual term is normally distributed

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