If the Errors Are Heteroskedastic, Then

question 2

Multiple Choice

If the errors are heteroskedastic, then

• A)the OLS estimator is still BLUE as long as the regressors are nonrandom.
• B)the usual formula cannot be used for the OLS estimator.
• C)your model becomes overidentified.
• D)the OLS estimator is not BLUE.

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Definitions:

Accounts Receivable Turnover

This ratio measures how efficiently a company collects revenue from its customers by dividing total sales by the average accounts receivable during a specific period.

Credit Sales

Sales transactions where the payment is deferred to a future date, essentially extending credit to the purchaser.

Credit Period

The amount of time allowed by a seller for a buyer to pay for goods or services received, typically expressed in days.

Operating Cycle

The time period between the acquisition of inventory and when cash is collected from receivables.