If OLS Is Used in the Presence of Heteroscedasticity, Which

question 24

Multiple Choice

If OLS is used in the presence of heteroscedasticity, which of the following will be likely consequences?
(I) Coefficient estimates may be misleading
(ii) Hypothesis tests could reach the wrong conclusions
(iii) Forecasts made from the model could be biased
(iv) Standard errors may inappropriate

• A) (ii) and (iv) only
• B) (i) and (iii) only
• C) (i), (ii), and (iii) only
• D) (i), (ii), (iii), and (iv).

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