A Study Based on OLS Regressions Is Internally Valid If

question 29

Multiple Choice

A study based on OLS regressions is internally valid if

• A)the errors are homoskedastic, and there are no more than two binary variables present among the regressors.
• B)you use a two-sided alternative hypothesis, and standard errors are calculated using the heteroskedasticity-robust formula.
• C)weighted least squares produces similar results, and the t-statistic is normally distributed in large samples.
• D)the OLS estimator is unbiased and consistent, and the standard errors are computed in a way that makes confidence intervals have the desired confidence level.

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Definitions:

Balance Sheet

A financial statement that presents a company's financial position at a specific point in time, including assets, liabilities, and shareholders' equity.

Manufacturing Business

A business model that transforms raw materials into final products utilizing workers, machinery, and tools.

Direct Materials

Materials that can be directly associated with the production of specific goods, integral to their manufacturing.

Controller's Staff

Pertains to the team of accounting professionals supervised by the controller, responsible for managing a company’s financial and accounting functions.