The Generalized Least Square (GLS) Is an Efficient Procedure That

question 19

Multiple Choice

The generalized least square (GLS) is an efficient procedure that weights each squared residual by the:​

• A)​conditional variance of u_i given x_i.
• B)​expected value of u_i given x_i.
• C)​inverse of the conditional variance of u_i given x_i.
• D)​square root of the inverse of the conditional variance of u_i given x_i.

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Definitions:

Savings Plan

A strategy designed to help individuals allocate a portion of their income for future use, typically involving deposit accounts or investments.

Semi-Annual Deposits

Deposits made twice a year into a financial account or investment vehicle.

Compounded Quarterly

Refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods on a quarterly basis.

Compounded Semi-Annually

Interest that is computed and added to the principal twice a year, allowing the investment to grow more rapidly.