In order to use the t-statistic for hypothesis testing and constructing a 95% confidence interval as 1.96 standard errors,the following three assumptions have to hold:
A)the conditional mean of ui,given Xi is zero; (Xi,Yi),i = 1,2,…,n are i.i.d.draws from their joint distribution;Xi and ui have four moments
B)the conditional mean of ui,given Xi is zero; (Xi,Yi),i = 1,2,…,n are i.i.d.draws from their joint distribution;homoskedasticity
C)the conditional mean of ui,given Xi is zero; (Xi,Yi),i = 1,2,…,n are i.i.d.draws from their joint distribution;the conditional distribution of ui given Xi is normal
D)none of the above

Question

In order to use the t-statistic for hypothesis testing and constructing a 95% confidence interval as  1.96 standard errors,the following three assumptions have to hold:
A)the conditional mean of ui,given Xi is zero; (Xi,Yi),i = 1,2,…,n are i.i.d.draws from their joint distribution;Xi and ui have four moments 
B)the conditional mean of ui,given Xi is zero; (Xi,Yi),i = 1,2,…,n are i.i.d.draws from their joint distribution;homoskedasticity 
C)the conditional mean of ui,given Xi is zero; (Xi,Yi),i = 1,2,…,n are i.i.d.draws from their joint distribution;the conditional distribution of ui given Xi is normal 
D)none of the above

Quizplus · Accepted Answer

The Answer of In order to use the t-statistic for hypothesis testing and constructing a 95% confidence interval as  1.96 standard errors,the following three assumptions have to hold:
A)the conditional mean of ui,given Xi is zero; (Xi,Yi),i = 1,2,…,n are i.i.d.draws from their joint distribution;Xi and ui have four moments 
B)the conditional mean of ui,given Xi is zero; (Xi,Yi),i = 1,2,…,n are i.i.d.draws from their joint distribution;homoskedasticity 
C)the conditional mean of ui,given Xi is zero; (Xi,Yi),i = 1,2,…,n are i.i.d.draws from their joint distribution;the conditional distribution of ui given Xi is normal 
D)none of the above

In Order to Use the T-Statistic for Hypothesis Testing and Constructing