Consider three methods of fitting a linear regression model – (a) lasso, (b) ridge regression, and (c) fitting nonlinear trends. For each method, choose the right answer, comparing it with the least squares regression: i. The method is more flexible and hence will give improved prediction accuracy when its increase in bias is less than its decrease in variance. ii. The method is more flexible and hence will give improved prediction accuracy when its increase in variance is less than its decrease in bias. iii. The method is less flexible and hence will give improved prediction accuracy when its increase in bias is less than its decrease in variance. iv. The method is less flexible and hence will give improved prediction accuracy when its increase in variance is less than its decrease in bias.
Sample Solution
