If the functional form of the conditional variance function is incorrect, then A)the standard errors computed by WLS regression routines are invalid B)the OLS estimator is biased C)instrumental variable techniques have to be used D)the regression R² can no longer be computed

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If the functional form of the conditional variance function is incorrect, then the standard errors computed by WLS regression routines are invalid. This is because WLS relies on accurate estimates of the variance function to appropriately weight the observations in the regression. If the variance function is misspecified, then the weighting will be incorrect, leading to incorrect standard errors.

If the Functional Form of the Conditional Variance Function Is