Mathematics · Econometrics and Regression Analysis
In Ordinary Least Squares (OLS) regression, which assumption ensures homoscedasticity?
- 1The error term has a constant variance.✓
- 2The error terms are positively autocorrelated.
- 3The independent variable is measured on a nominal scale.
- 4The error terms follow a non-zero mean distribution.
Correct answer
The error term has a constant variance.
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