Linear Regression

Question 1

Ols can be used for…

Answer 1

Linear regression
Can’t be multiples or squared
Or transform a non linear using logs
Or substitute related variables to get rid of non linearity

Question 2

Assumptions of linear regression - clrm

Answer 2

1. Errors have mean 0
2. Variance of errors is constant
3. Errors are linearly independent of each other
4. No relationship between error and x variables
5. Ut (disturbance term) is normally distributed

Question 3

First 4 assumptions name

Answer 3

Blue-best linear unbiased estimators

Question 4

Test statistic formula

Answer 4

B-B*/ SE(B)