By John Neter
Utilized Linear Statistical types
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Extra resources for Applied linear regression models
pCQ. In all instances the following holds: L: =Ii "I 2 = >y. z
Y)EA only if they meet (1') and (2') for all WEn. E) d~l(l') and (2') for all WEn}2). n 1) Especially neither additional financial opportunities nor a postponement may be obtained. 2) Cf. def. 1. 7 •• E 43 Usually this formulation is felt to be to pessimistic because it implies that for many problems there are no feasible actions at all. y)eA partially violating condition (1') or (2') (for some wen) makes the statement of the problem incomplete: there is no well -defined objective; for. ) bankruptcy has taken place by assumption (because of illiquidity; by assumption there are no additional activities available in t 1 ).
But. if for all wen the objective-achievement can be determined the side condition (1') is unnecessary; then. the problem of guaranteeing the firm's liquidity has been transformed to a problem of rentability. y and w. Similar statements hold if condition (2') is violated. w) the objective-achievements cannot be determined. the "danger" of such cases occurring has to be taken in and must be confronted with the "chances" of "profitable" objective-achievements. 1 ) Since there is no alternate information the decision maker can only construct further criteria in order to respond to this danger.