(2) State with brief reasons whether the following statements are true, false, o
ID: 2933989 • Letter: #
Question
(2) State with brief reasons whether the following statements are true, false, or uncertain OLS is an estimating procedure that minimizes the sum of the errors squared. a. b. The assumptions made by the classical linear regression model (CLRM) are not necessary to compute OLS estimators. The theoretical justification for OLS is provided by the Gauss-Markov theorem. In the two-variable PRF, bz is likely to be a more accurate estimate of B2 if the disturbances u follow the normal distribution. c. d. e. The OLS estimators b; and b: each follow the normal distribution only if u follows the norma f· r' is the ratio of TSS/ESS. distribution. For a given a, the level of significance, and df, the degree of freedom, if the computed Itl exceeds the critical t value, we should accept the null hypothesis. The coefficient of correlation, r, has the same sign as the slope coefficient b2. The p value and the level of significance, a, mean the same thing. g. h. i.Explanation / Answer
a) false because ols minimizes only sum of the squared residuals
b) false because they have made 5 asumptions to caluclate
c) true its provided by gauss markov therom
d) In the two-variable PRF, b2 is likely to be a more accurate estimate of B2 if the disturbances ui follow the normal distribution.
Answer: True
e) The OLS estimators b1 and b2 each follow the normal distribution only ui follows the normal distribution.
Answer: True
f) r2 is the ratio of TSS/ESS.
Answer: False (r2 is ratio of ESS/TSS)
g) For a given alpha and d.f., if the computed t exceeds the critical t value, we should accept the null hypotheses.
Answer: False (we should reject the null hypothesis since there is evidence of a treatment effect.)
h) The confident of correlation, r, has the same sign as the slope coefficient b2.
Answer: True. (The numerator of both involves the covariance between Y and X which can be positive or negative)
i) The p value and the level of significance, alfa, mean the same thing.
Answer: uncertain.
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