Question

True or False: The zero conditional mean assumption, E[|X] = 0, implies that X and epsilon are uncorrelated. Explain.

Answer #1

If the zero conditional mean assumption does not hold but
homoskedasticity is satisfied, the OLS estimator will still be
BLUE. A)True B) False

1. Given Assumption 1: Conditional distribution of ui given Xi
has mean zero: E[ui |Xi ] = 0
(a) Suppose Xi and ui are independent and that E[ui ] = 0. Show
that Assumption 1 holds.
(b) In the late 1980s, the Tennessee government ran project
STAR. It cost $12m to implement at the time (the Tennessee budget
on K-12 education was $212m in FY 2018-19). In project STAR,
students and teachers were randomly assigned small (13-17 students)
or large...

let f(x) = 3x3 - 2 and let epsilon>0 be given Find
a delta so that |x -1 |<=delta implies |f(x) -1|<=epsilon

(a) TRUE / FALSE If X is a random variable, then (E[X])^2 ≤
E[X^2]. (b) TRUE / FALSE If Cov(X,Y) = 0, then X and Y are
independent. (c) TRUE / FALSE If P(A) = 0.5 and P(B) = 0.5, then
P(AB) = 0.25. (d) TRUE / FALSE There exist events A,B with P(A)not
equal to 0 and P(B)not equal to 0 for which A and B are both
independent and mutually exclusive. (e) TRUE / FALSE Var(X+Y) =
Var(X)...

True or False:
1) ____ The "exclusion restriction" imposed on the instrumental
variable z implies that z is excluded from the causal model of
interest.
2) ____ The panel data estimator that uses first differencing to
eliminate the "unobserved effect" will be less efficient than the
estimator that applies deviations from means (time-demeaning) when
the panel includes more than two periods and the idiosyncratic
error is homoscedastic and serially uncorrelated.
3) ____ A graph plotting the time evolution of the...

True or false
A.The most probable velocity in the x direction is zero (0) for
an ideal gas.
B. Doubling the absolute temperature will double the root mean
square speed of an ideal gas.
C. Doubling the absolute temperature will double the
translational energy of an ideal gas.
D. If two different pure gases are at the same temperature, the
average kinetic energy of the one gas is equal to the average
kinetic energy of the second gas.
E. Diffusion...

True/False: Conditional mean prediction and linear prediction
yield the same predictions.
True/False: All autoregressive equations have stationary
solutions.
Name one time series model that is non-stationary.
________________

True or false? and explain please.
(i) Let Z = 2X + 3. Then, Cov(Z,Y ) = 2Cov(X,Y ).
(j) If X,Y are uncorrelated, and Z = −5−Y + X , then V ar(Z) = V
ar(X) + V ar(Y ).
(k) Let X,Y be uncorrelated random variables (Cov(X,Y ) = 0) with
variance 1 each. Let A = 3X + Y . Then, V ar(A) = 4.
(l) If X and Y are uncorrelated (meaning that Cov[X,Y ] =...

True or False: 1) A crucial assumption of the linear model is
that the sum of the residuals is 0
2)In the simple linear regression model if the R^2 is equal to
one, then the linear relationship between the variable is exact and
residuals are all zero

Portfolio diversification hypothesis relaxes the risk
neutrality assumption under differential rate of return hypothesis.
True
False
Portfolio diversification hypothesis relaxes the risk
neutrality assumption under differential rate of return hypothesis.
True
False
Suppose the spot exchange rate E€/$ = 1.25. However, the
expected exchange rate in a year’s time is
Ee €/$ = 1.7. This implies that
investors expect the dollar to appreciate.
False
True
Suppose Frank invests $7,000 in a domestic asset for a year.
The amount returned to him...

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