1. Linearity assumption.
This assumption States that there exist linear relationship between dependent variable Y and a single explanatory variable X and the stochastic term.
2. Zero mean assumption.
The stochastic term is a random variable with zero expectations.
3. Normality assumption.
The stochastic terms are set of serially independent normally distributed random variable with common expectation of zero.
4. Explanatory variable and the stochastic term are independent.
5. Explanatory variable X is fixed in repeated sampling and represent a set of numbers which are fixed in repeated sampling.
Jonmhumble answered the question on October 30, 2017 at 19:27
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