Introductory Econometrics 4th Edition by Jeffrey Wooldridge

تمرين 4

Suppose that the model
satisfies the first four Gauss-Markov assumptions, where pctstck is the percentage of a worker's pension invested in the stock market, funds is the number of mutual funds that the worker can choose from, and risktol is some measure of risk tolerance (larger risktol means the person has a higher tolerance for risk). If funds and risktol are positively correlated, what is the inconsistency in 1 the slope coefficient in the simple regression of pctstck on funds