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A Linear Probability Model Is Likely to Violate Which Assumption σ\sigma

Question 1

Multiple Choice

A linear probability model is likely to violate which assumption of MR most of the time?


A) The values of each xik are not random and are not exact linear functions of the other explanatory variables
B) var(yi. ) = var(ei) = σ\sigma 2
C) E(yi) = β\beta 1 + β\beta 2xi2 + β\beta 3xi3 + …….+ β\beta kxik,⟺E(ei) = 0
D) cov(yi,yj) = cov(ei,ej) = 0; (i≠j)

Correct Answer:

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