QUESTION 1 Consider the following regression model, Y;=B1+B2X12+ + BxXik+ ej where E[e;|x;]=0 and Var(e,x,) depends on the value of Xj i.e., Var(e,|x) = o². Choose the correct statement. d. To get...

Extracted text: QUESTION 1 Consider the following regression model, Y;=B1+B2X12+ + BxXik+ ej where E[e;|x;]=0 and Var(e,x,) depends on the value of Xj i.e., Var(e,|x) = o². Choose the correct statement. d. To get around the problem, we often assume that ej is normally distributed. O D. To fix the problem, we need to have an instrumental variable. (X12° O C. This problem implies that errors are correlated with one of Od. If we assume Var(e,lx) = o2, the confidence interval is not valid. е. None of the above is correct.