7. The components of the OLS variances Under assumptions MLR.1 through MLR.5, conditional on the sample values of the independent variables, the variance of B; under OLS is: Var (Bj sST, (1- tE) where o = the variance of the error term SST; = the total sample variation of z; = the R-squared from a regression of I; on all of the other explanatory variables, along with an intercept parameter The variance of B as R increases. For the given model, which of the following would lead to a reduction of the sampling variance of B;? O Using the same data set with the same number of observations Choosing an explanatory variable It that is uncorrelated with the other explanatory variables in the model Adding irrelevant explanatory variables to the model that are correlated with I; Adding an explanatory variable that is equal to 5 +1;

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