ECS3706 ASSIGNMENT 2
(COMPLETE ANSWERS)
SEMESTER 2 2024 (399706)
- DUE SEPTEMBER 2024
ADMIN
[COMPANY NAME] [Company address]
, ECS3706 Assignment 2 (COMPLETE ANSWERS) Semester
2 2024 (399706) - DUE September 2024
1. Explain why econometricians must know and understand the
classical linear regression assumptions. (4) 2. Explain the
role of the Central Limit Theorem in statistical hypothesis
testing (3) 3. You came across a recent (24 April 2024)
News24 article,
Importance of Understanding Classical Linear Regression
Assumptions
Econometricians must know and understand the classical linear
regression assumptions for several crucial reasons.
The classical linear regression model is based on several
assumptions, including linearity, independence,
homoscedasticity, normality of errors, and no perfect
multicollinearity. Understanding these assumptions allows
econometricians to assess the validity of their model. If any of
the assumptions are violated, the results may be biased,
inconsistent, or inefficient.
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