Estimation by WLS

question 44

Multiple Choice

Estimation by WLS

• A)although harder than OLS, will always produce a smaller variance.
• B)does not mean that you should use homoskedasticity-only standard errors on the transformed equation.
• C)requires quite a bit of knowledge about the conditional variance function.
• D)makes it very hard to interpret the coefficients, since the data is now weighted and not any longer in its original form.

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Definitions:

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