Mathematics · Econometrics
Given below are two statements: Assertion (A): The presence of heteroscedasticity in regression analysis implies that the OLS estimators are still unbiased but inefficient. Reason (R): Under heteroscedasticity, the estimates of the variances are also biased. In the light of the above statements, choose the most appropriate answer:
- 1(A) is false, but (R) is false
- 2(A) is true, but (R) is false
- 3Both (A) and (R) are true, but (R) is NOT the correct explanation of (A)✓
- 4Both (A) and (R) are true, and (R) is the correct explanation of (A)
Correct answer
Both (A) and (R) are true, but (R) is NOT the correct explanation of (A)
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