Feasible WLS does not rely on the following condition:
A)the conditional variance depends on a variable which does not have to appear in the regression function.
B)estimating the conditional variance function.
C)the key assumptions for OLS estimation have to apply when estimating the conditional variance function.
D)the conditional variance depends on a variable which appears in the regression function.

Question

Quizplus · Accepted Answer

Feasible Weighted Least Squares (WLS) can be applied even when the conditional variance depends on a variable that does not appear in the regression function, making D incorrect. The method involves estimating the conditional variance function and assumes that the key OLS assumptions apply to this estimation process.

Feasible WLS Does Not Rely on the Following Condition