The Gauss-Markov Theorem Proves That

question 30

Multiple Choice

The Gauss-Markov Theorem proves that

• A)the OLS estimator is t distributed.
• B)the OLS estimator has the smallest mean square error.
• C)the OLS estimator is unbiased.
• D)with homoskedastic errors, the OLS estimator has the smallest variance in the class of linear and unbiased estimators, conditional on X₁,…, X_n.

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Definitions:

Psychological Impact

The effect that an event, action, or circumstance has on the mental state or emotional wellbeing of an individual or group.

Net Worth

The total value of an individual's or organization's assets minus liabilities, representing the actual value of ownership equity.

Operating Costs

Expenses associated with the day-to-day functioning of a business, including costs for rent, utilities, payroll, and raw materials.

Discretionary Income

The portion of a person's income remaining for investment, savings, or expenditures after deducting taxes and essential living costs such as housing and food.