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

question 87

Multiple Choice

The least squares method requires that the variance $$\sigma _ { \varepsilon } ^ { 2 }$$ 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) multicollinearity.
• B) heteroscedasticity.
• C) homoscedasticity.
• D) autocorrelation.

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