Which of the Following Assumptions Is Required for Obtaining Unbiased

question 7

Multiple Choice

Which of the following assumptions is required for obtaining unbiased fixed effect estimators?

• A)The errors are heteroskedastic.
• B)The errors are serially correlated.
• C)The explanatory variables are strictly exogenous.
• D)The unobserved effect is correlated with the explanatory variables.

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Definitions:

Traceable Fixed Expense

Fixed costs that can be directly associated with a specific product, department, or segment of a business, facilitating more accurate financial analysis.

Net Operating Income

The profit generated from a company's core business operations, excluding expenses and revenues not directly related to its main activities.

Nearest Whole Number

A rounding of a number to the closest integer, without any decimal part.

Balanced Scorecard

A strategic planning and management system that organizations use to communicate what they are trying to accomplish and measure progress against these objectives.