Under imperfect multicollinearity
A)the OLS estimator cannot be computed.
B)two or more of the regressors are highly correlated.
C)the OLS estimator is biased even in samples of n 100.
D)the error terms are highly, but not perfectly, correlated.

Question

Under imperfect multicollinearity
A)the OLS estimator cannot be computed.
B)two or more of the regressors are highly correlated.
C)the OLS estimator is biased even in samples of n > 100.
D)the error terms are highly, but not perfectly, correlated.

Quizplus · Accepted Answer

Under imperfect multicollinearity, two or more of the regressors are highly correlated, but the OLS estimator can still be computed. However, the presence of multicollinearity can lead to biased and inefficient estimators.

Under Imperfect Multicollinearity