• Based on the text on regression assumptions and your additional research, discuss the potential impact of assumption violation on interpretation of regression results.
• Is there any influence of the assumption violation on the business decision making? If so, how? If not, why?

  Regression analysis is a statistical technique that can test the hypothesis that a variable is dependent upon one or more other variables. Further, regression analysis can provide an estimate of the magnitude of the impact of a change in one variable on another. This last feature, of course, is all important in predicting future values.

  Regression analysis is based upon a functional relationship among variables and further, assumes that the relationship is linear. This linearity assumption is required because, for the most part, the theoretical statistical properties of non-linear estimation are not well worked out yet by the mathematicians and econometricians.