ECS3706 Assignment 2

Question 1 a) It is possible to get unbiased estimators when Xt and ut are correlated. b) Obtaining a high p-value is evidence that the coefficients are significantly different from zero. This statement is incorrect as P-values higher than 0.05 ( 0.05) are not statistically significant and indicate strong evidence for the null hypothesis. In other words, we reject the alternative hypothesis and maintain the null hypothesis. The statistical significance of a result does not prove the correctness of the research hypothesis (as this implies a 100% certainty). We might say instead that our results "support" or "provide evidence for" our research hypothesis (since there is still a small possibility that the results occurred by chance and the null hypothesis was correct - less than 5%). c) All the ut must be normally distributed in order for the estimators to be regarded Best Linear Unbiased Estimators (BLUE). This statement is correct because d) The