+ Consider the following regression model, Y;= B1+B2Xi2+ +BKXik+e; where E[e;|xi]=0 and Var(e;|xi) depends on the value

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Consider The Following Regression Model Y B1 B2xi2 Bkxik E Where E E Xi 0 And Var E Xi Depends On The Value 1 (76.5 KiB) Viewed 110 times

+ Consider the following regression model, Y;= B1+B2Xi2+ +BKXik+e; where E[e;|xi]=0 and Var(e;|xi) depends on the value of xj, i.e., Var(e;|x;) + 02. Choose the correct statement. a. To get around the problem, we often assume that e; is normally distributed. 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, ..., Xik). O d. If we assume Var(e;|x;) = o2, the confidence interval is not valid. e. None of the above is correct.