+ B2X12+ .. + BxX iK+ ej Te,|x,]= 0 and Var(e,|x,) depends on the value of xp i.e., Var(e;|\> the correct statement. o get around the problem, we often assume that e, is normally distributed. o fix the problem, we need to have an instrumental variable. his problem implies that errors are correlated with one of (x12, .., X). we assume Var(e,lx,) = o2, the confidence interval is not valid. one of the above is correct.

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
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Question
7
Consider the following regression model,
Y;= B1 + B2Xi2 + .. + BxX ik+ e;
where E[ e;|x;] = 0 and Var(e, x) depends on the value of Xp i.e., Var(e;|x) = o2.
Choose the correct statement.
O a. To get around the problem, we often assume that e, is normally distributed.
O b. To fix the problem, we need to have an instrumental variable.
O C. This problem implies that errors are correlated with one of (xi2, ., x ik):
O d. If we assume Varle,lx) = o2, the confidence interval is not valid.
O e. None of the above is correct.
Transcribed Image Text:Consider the following regression model, Y;= B1 + B2Xi2 + .. + BxX ik+ e; where E[ e;|x;] = 0 and Var(e, x) depends on the value of Xp i.e., Var(e;|x) = o2. Choose the correct statement. O a. To get around the problem, we often assume that e, is normally distributed. O b. To fix the problem, we need to have an instrumental variable. O C. This problem implies that errors are correlated with one of (xi2, ., x ik): O d. If we assume Varle,lx) = o2, the confidence interval is not valid. O e. None of the above is correct.
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