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Please help me. QUESTION 1 Consider the following regression model, .Vr = 51 ' Bzxrz ' + BKXiK+ 9; where E[ 9: Xi] = 0

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QUESTION 1 Consider the following regression model, .Vr = 51 "' Bzxrz '" + BKXiK+ 9; where E[ 9:" Xi] = 0 and Var(e,| Xi) depends on the value of Xi' i.e., V0r(9i| Xi) ,3 02. Choose the correct statement. A K 7 3 a. To get around the problem, we often assume that e'. is normally distributed. . b' To x the problem, we need to have an instrumental variable. A This problem Implles that errors are correlated With one of (X12: ..., XIX)- ('3 If we assume Va r(9i| Xi) = 02, the condence Interval IS not valid. r\". e . None of the above Is correct

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