The Least Squares Method Requires That the Variance $\sigma _ { z } ^ { 2 }$

question 48

Multiple Choice

The least squares method requires that the variance $\sigma _ { z } ^ { 2 }$ of the error variable $\varepsilon$ is a constant no matter what the value of x is. When this requirement is violated, the condition is called:

• A)heteroscedasticity.
• B)homoscedasticity.
• C)influential observation.
• D)non-independence of \(\varepsilon\).

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