Question 2.120

2.120 Residuals for companies of the world with logs

Refer to the previous exercise.

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  1. Use a histogram to examine the distribution of the residuals.
  2. Make a Normal quantile plot of the residuals.
  3. Summarize the distribution of the residuals using the graphical displays that you created in parts (a) and (b).
  4. Repeat parts (a), (b), and (c) for the original data, and compare these results with those you found in parts (a), (b), and (c). Which do you prefer? Give reasons for your answer.