The Following Are All Least Squares Assumptions with the Exception $u _ { i }$

question 52

Short Answer

The following are all least squares assumptions with the exception of: a. The conditional distribution of $u _ { i }$ given $X _ { i }$ has a mean of zero.
b. The explanatory variable in regression model is normally distributed.
c. $\left( X _ { i } , Y _ { i } \right) , i = 1 , \ldots , n$ are independently and identically distributed.
d. Large outliers are unlikely.

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Definitions:

Discount

A reduction applied to the regular price of goods or services, typically offered to prompt payment or to certain customers.

Bonds Payable

Long-term liabilities representing money owed by a company to bondholders, to be repaid by a specified date.

Issue Price

Issue price is the cost at which new securities are offered to the public by an issuer, determining the initial capital raised from the financial market.

Par Value

The nominal or face value of a security as indicated by the issuer.