Question

In: Statistics and Probability

Q: Answer yes or no to each of the items from a to c. If yes,...

Q: Answer yes or no to each of the items from a to c. If yes, briefly justify the statement, if no, provide a counter-example or disprove the statement.

a) We have a sample of n individuals, indexed by i = 1, · · · , n. For the i-th individual, we can observe Xi and Yi. If we assume our sample is i.i.d. cross-sectionally, it implies Xi and Yi are independent with each other.

b) In multivariate OLS, we have three regressors X1, X2, X3. If (X1, X2), (X1, X3), and (X3, X2) are not perfectly correlated, then we do not have the perfect multicollinearity.

c) T-test is still valid when OLS assumption 1 correct specification is violated.

Solutions

Expert Solution

Answer:-

Given That:-

Answer yes or no to each of the items from a to c. If yes, briefly justify the statement, if no, provide a counter-example or disprove the statement.

a) We have a sample of n individuals, indexed by i = 1, · · · , n. For the i-th individual, we can observe Xi and Yi. If we assume our sample is i.i.d. cross-sectionally, it implies Xi and Yi are independent with each other.


False

Let us consider Xi and Yi as variables for heights and weights of a certain population. There may be some dependency between the two variables. To be precise it can be said that, (Xi,Yi) is independent to (Xj,Yj) given that but it canot be said that Xi can be dependent on Yi

b) In multivariate OLS, we have three regressors X1, X2, X3. If (X1, X2), (X1, X3), and (X3, X2) are not perfectly correlated, then we do not have the perfect multicollinearity.

True

Suppose consuder that in mutivariate OLS, we have here 3 regressors, X1, X2 and X3. The OLS assumption of multicollinearity signifies that there should not be no linear relationship between the independent variables. So considering that pairs of (X1,X2) , (X2,X3) and (X3,X1) are not perfectly correlated, then we do not have the perfect multicollinearity.

c) T-test is still valid when OLS assumption 1 correct specification is violated.

True

T test is used for conducting hypothesis test on regression coefficients. Violations of normality in OLS can be mitigated by t tests


If you are satisfied by my given answer please help me out by giving thumbs up .


Related Solutions

Q: Answer yes or no to each of the items from a to c. If yes,...
Q: Answer yes or no to each of the items from a to c. If yes, briefly justify the statement, if no, provide a counter-example or disprove the statement. a) We have a sample of an individuals, indexed by i = 1, · · · , n. For the i-th individual, we can observe Xi andYi. If we assume our sample is i.i.d. cross-sectionally, it implies Xi and Yi are independent with each other. b) In multivariate OLS, we have...
For each of the items listed below, indicate “yes” if the statement is true and “no”...
For each of the items listed below, indicate “yes” if the statement is true and “no” if it is not true. If you indicate “no” (ie the statement is NOT true) you must describe the hazard and associated risk, and indicate the action required. FILL OUT THE TABLE BELOW! The Question is above :) Item Yes ✓ No ✗ Description of hazard Associated risk Action required (more than one item may be chosen) The workplace is clean and tidy ☐...
Choose "yes" or "no" as applicable for each of the following items to indicate whether the...
Choose "yes" or "no" as applicable for each of the following items to indicate whether the cost can appropriately be debited to the plant asset ledger account. Transportation costs to ship the asset to our facilities. (Y/N) Set up and installation costs of the asset. (Y/N) Insurance while the asset is in transit to our facilities. (Y/N) Insurance while the asset is being run during routine operations. (Y/N) Costs to train employees on how to use the new asset. (Y/N)...
​​​​​Select the best answer for each of the following unrelated items. Answer each of these items...
​​​​​Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Which of the following is an...
Please answer fast Two items are omitted from each of the following summaries of balance sheet...
Please answer fast Two items are omitted from each of the following summaries of balance sheet and income statement data for two proprietorships for the year 2020, Wildhorse's Goods and Pharoah Enterprises. Determine the missing amounts. Wildhorse's Goods Pharoah Enterprises Beginning of year:     Total assets $150,788 $176,833     Total liabilities 116,518 $enter a dollar amount (c)     Total owner’s equity $enter a dollar amount (a) 109,664 End of year:     Total assets 219,328 246,744     Total liabilities 164,496 68,540     Total owner’s equity 54,832 178,204...
Q: Choose the correct answer Income is considered one of the most important items in financial...
Q: Choose the correct answer Income is considered one of the most important items in financial statements because: a-Investment Guide b-Scope for determining accounting policies c-The intellectual premise of honest representation d-Application for the basis of the interview 2- The name Of Luke Basiloli of Italy is linked to the following: a-Money b-The Art of Writing c- Record-keeping system d-Trade 3- The concepts of continuity, periodicity and entitlement appeared at the stage of: a-Asset processing phase b-Industrial Revolution c-Expand ing...
Is Franchising beneficial from Franchiser perspective? Yes, or No, Defend your answer with fact and theory....
Is Franchising beneficial from Franchiser perspective? Yes, or No, Defend your answer with fact and theory. At least five reasons to justify the answer
Are the following subshell designations correct? Answer with "yes" or "no".
Are the following subshell designations correct? Answer with "yes" or "no". a. 3p b. 1s C. 2d d. 4s e. 2p f. 5f
Determine an A-B-C classification for these items: • Which items are A, B, and C -...
Determine an A-B-C classification for these items: • Which items are A, B, and C - explain how you derive the answers? Item   Unit Cost Annual volume(000) 1 300 25 2 90 30 3 30 60 4 50 10 5 15 70 6 100 40 7 10 60 Hint: Determine the Annual Dollar Value (Unit Cost * Annual Volume) for each item and the sum of the individual Annual Dollar Values. Arrange the items in descending order based on Annual...
Four point charges of Q = 4πε0 C each are located at the corners of a...
Four point charges of Q = 4πε0 C each are located at the corners of a square 1 meter on a side. If the square is placed at the z = -1 plane and its center is on the z axis, find the electric field intensity E at: (i) the origin; (ii) at P1 (0, 0, -1); and (iii) at P1 (0, 0, 1).
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT