If You Are Estimating Y = $\beta$ ₁ $\beta$ ₂x + E
and Realize X and Y Are Both

question 13

Multiple Choice

If you are estimating y = $\beta$ ₁ + $\beta$ ₂x + e
And realize x and y are both random variables,what condition must be true for simple regression estimators to be BLUE?

• A)the data have been collected via random sampling
• B)the data are time series data
• C)e is normally distributed
• D)x is normally distributed

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher volatility.

Treynor's Measure

A performance metric for determining how well an investment compensates the investor for its risk, comparing returns to the market portfolio.

Residual Standard Deviation

A measure of the amount by which an observation differs from its expected value, specifically in the context of a regression model.

Beta

A measure of a stock's volatility in relation to the overall market, indicating the level of risk associated with investing in the stock.