Both OLS and Probit Models Require That the Error Term

question 14

True/False

Both OLS and probit models require that the error term be normally distributed.

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Definitions:

Dealer Market

A financial market mechanism in which transactions are made through dealers who buy and sell securities for their own accounts.

OTC Market

Over-The-Counter Market, where securities are traded directly between parties without a central exchange, often used for stocks not listed on formal exchanges.

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of earned income, commonly seen in corporate dividends.

Sole Proprietorships

A business owned and operated by a single individual, where the owner and the business are legally the same entity.