select the correct answer. a financial analyst constructs a statistical model to represent the market shares…

select the correct answer. a financial analyst constructs a statistical model to represent the market shares of several similar companies. she then collects data over the next month to evaluate her model. at the end of the month, she finds that for one of the companies, the difference between her model and the data is 5%. she decides to collect data for an additional two months. if her model is valid, what could she expect from the total data collected after three months? a. the difference between the data and the model will get larger. b. it is impossible to predict how the difference between the data and the model will change. c. the difference between the data and the model will stay the same. d. the difference between the data and the model will get smaller.

select the correct answer. a financial analyst constructs a statistical model to represent the market shares of several similar companies. she then collects data over the next month to evaluate her model. at the end of the month, she finds that for one of the companies, the difference between her model and the data is 5%. she decides to collect data for an additional two months. if her model is valid, what could she expect from the total data collected after three months? a. the difference between the data and the model will get larger. b. it is impossible to predict how the difference between the data and the model will change. c. the difference between the data and the model will stay the same. d. the difference between the data and the model will get smaller.

Answer

Explanation:

Step1: Understand the concept of a valid model

A valid statistical model should maintain a consistent relationship with the data over time if the underlying conditions remain the same.

Step2: Analyze the situation

Since the model is valid and there is no indication that the market - share dynamics of the companies have changed in the next two months, the difference between the data and the model is likely to stay consistent.

Answer:

C. The difference between the data and the model will stay the same.