Omitting an important explanatory variable

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Reference no: EM13743048

Which of the following can cause the usual OLS t statistics to be invalid (that is, not to have t distributions under H0)?

(i) Heteroskedasticity.

(ii) A sample correlation coefficient of .95 between two independent variables that are in the model.

(iii) Omitting an important explanatory variable.

Reference no: EM13743048

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