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Unformatted text preview: EF5070 October 18, 2010 Econometrics Homework Assignment 2 Due on or before Oct 30, 2010 6:30pm ( Thur. &Sat. sessions ) Each question carries 25 points. 1. Which of the following can cause the usual OLS t statistics to be invalid (that is, not to have t distributions under H )? Explain. (i) Heteroskedasticity. (ii) A sample correlation coefficient of 0.95 between two independent variables that are in the model. (iii) Omitting an important explanatory variable. [source: Problem 4.2 (p. 159) Wooldridge (2009).] 2. In a study relating college grade point average (GPA) to time spent in various activities, you distribute a survey to several students. The students are asked how many hours they spend each week in four activities: studying, sleeping, working, and leisure. Any activity is put into one of the four categories, so that for each student, the sum of hours in the four activities must be 168....
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This note was uploaded on 10/22/2010 for the course EF 3232 taught by Professor Fdsfd during the Spring '10 term at City University of Hong Kong.
 Spring '10
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