The conditions for a valid instruments do not include the following:
A)each instrument must be uncorrelated with the error term.
B)each one of the instrumental variables must be normally distributed.
C)at least one of the instruments must enter the population regression of X on the Zs and the Ws.
D)perfect multicollinearity between the predicted endogenous variables and the exogenous variables must be ruled out.

Question

Quizplus · Accepted Answer

While normally distributed instrumental variables are desirable, it is not a requirement for the validity of the instrument. Choices A, C, and D are all conditions that must be met for an instrument to be considered valid.

The Conditions for a Valid Instruments Do Not Include the Following