What Are the Consequences of Using Least Squares When Heteroskedasticity

question 3

Multiple Choice

What are the consequences of using least squares when heteroskedasticity is present?

• A)no consequences,coefficient estimates are still unbiased
• B)confidence intervals and hypothesis testing are inaccurate due to inflated standard errors
• C)all coefficient estimates are biased for variables correlated with the error term
• D)it requires very large sample sizes to get efficient estimates

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