Consider the Following Regression Equation

question 15

Multiple Choice

Consider the following regression equation: . Which of the following indicates a functional form misspecification in E(y|x) ?

• A)Ordinary Least Squares estimates equal Weighted Least Squares estimates.
• B)Ordinary Least Squares estimates exceed Weighted Least Squares estimates by a small magnitude.
• C) Weighted Least Squares estimates exceed Ordinary Least Squares estimates by a small magnitude.
• D) Ordinary Least Square estimates are positive while Weighted Least Squares estimates are negative.

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