Which of the following statements is true? A)Taking a log of a nonnormal distribution yields a distribution that is closer to normal. B)The mean of a nonnormal distribution is 0 and the variance is ². C) The CLT assumes that the dependent variable is unaffected by unobserved factors. D) OLS estimators have the highest variance among unbiased estimators.

Question

Quizplus · Accepted Answer

Taking the logarithm of a non-normal distribution often results in a more normal distribution. This is because the logarithm compresses the high values and spreads out the low values, making the distribution more symmetrical. Transformations such as logs of nonnormal distributions, yields distributions which are closer to normal.

Which of the Following Statements Is True