In a Regression Model, If Variance of the Dependent Variable

question 21

Multiple Choice

In a regression model, if variance of the dependent variable, y, conditional on an explanatory variable, x, or Var(y|x) , is not constant, _____.

• A)the t statistics are invalid and confidence intervals are valid for small sample sizes
• B)the t statistics are valid and confidence intervals are invalid for small sample sizes
• C)the t statistics and the confidence intervals are valid no matter how large the sample size is
• D)the t statistics and the confidence intervals are both invalid no matter how large the sample size is

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Definitions:

Goodwill

An intangible asset representing the excess of the purchase consideration over the fair value of net identifiable assets of a business acquired.

Business Combination

A transaction or event in which an acquirer gains control over one or more businesses, often involving mergers, acquisitions, or consolidations.

Impairment

A decrease in the recoverable amount of an asset to below its carrying amount on the balance sheet, resulting in a charge to the company's earnings.

Cash-Generating Units

The smallest identifiable group of assets that generates cash inflows independently of other assets or groups of assets.