If the Functional Form of the Conditional Variance Function Is

question 40

Multiple Choice

If the functional form of the conditional variance function is incorrect, then

• A)the standard errors computed by WLS regression routines are invalid
• B)the OLS estimator is biased
• C)instrumental variable techniques have to be used
• D)the regression R² can no longer be computed

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Definitions:

Divergent Thinking

Expanding the number of possible problem solutions; creative thinking that diverges in different directions.

Fixation

(1) in thinking, the inability to see a problem from a new perspective; an obstacle to problemsolving. (2) in personality theory, according to Freud, a lingering focus of pleasure-seeking the developing human organism from about 2 weeks after fertilization through the secondmonth

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions.

New Perspective

Fresh outlook or approach towards understanding or addressing an issue or concept.