Mathematics, 10.10.2019 02:30 Luena
The least squares assumptions , where= ++ , = yiβ0β0xiuiin1. the error term has conditional mean zero given : ; uixi∣= 0euixi2. , are independent and identically distributed (i. i.d.) draws from their joint distribution; and, , = xiyiin3. large outliers are unlikely: and have nonzero finite fourth moments. xiyisuppose the first assumption is replaced with . what happens to ? ∣= 2euixi∣eyixia. both the intercept and the slope change to and respectively. β0β1+ 2β0+ 2β1b. nothing changes. c. the intercept changes to .β0+ 2β0d. the slope changes to .β1+ 2β1are the rest of the ols assumptions satisfied? a. both ols assumptions (2) and (3) are satisfied. b.ols assumption (2) is satisfied but not (3).c. neither ols assumption (2) nor (3) is satisfied. d. ols assumption (3) is satisfied but not (2).
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