Which of the following is the similarity between how heteroscedasticity and autocorrelations occur?
A)Both of them occur due to biased coefficient estimates.
B)Both of them occur due to highly correlated independent variables.
C)Both of them occur due to uniform variances across dependent variables.
D)Both of them occur due to assumptions in the distribution of error terms.

Question

Quizplus · Accepted Answer

Both heteroscedasticity and autocorrelations occur due to violations or incorrect assumptions in the distribution of error terms. Heteroscedasticity occurs when the variance of the error terms is not constant, while autocorrelations occur when the error terms are not independent and identically distributed. Both of these violations can lead to biased coefficient estimates and incorrect statistical inference.

Which of the Following Is the Similarity Between How Heteroscedasticity