The error term is homoskedastic if A)var(u_i |$\left. X _ { i } = x \right)$ is constant for i = 1,…, n. B)var(u_i |$\left. X _ { i } = x \right)$ depends on x. C)X_i is normally distributed. D)there are no outliers.

Question

Quizplus · Accepted Answer

Homoskedasticity refers to the condition where the variance of the error terms in a regression model is constant across all levels of the independent variable. Choice A correctly defines this condition by stating that the variance of the error term given any value of X is constant for all observations.

The Error Term Is Homoskedastic If A)var(ui | Xi=x)\left. X _ { i } = x \right)Xi​=x)

The Error Term Is Homoskedastic If
A)var(u_i | $\left. X _ { i } = x \right)$