CFA should give bonus points to those that can spell the word Heteroskedasticity!
The LOS reads:
"Discuss the types of heteroskedasticity and the effects of heteroskedasticity and serial correlation on statistical inference"
There are 4 areas that appear to be important:
1. What is heteroskedasticity
2. What are the effects of heteroskedasticity
3. Detecting heteroskedasticity
4. How do you correct for heteroskedasticity
1. What is heteroskedasticity?
In Reading 11 & earlier in Reading 12 the underlying assumptions of the Linear Regression Model were discussed. Assumption 4 relates to Homoscedasticity, being the opposite of Heteroskedasticity.
The summary of the definition was:
(NB - Remember that Error term also refers to the Residual)
The LOS reads:
"Discuss the types of heteroskedasticity and the effects of heteroskedasticity and serial correlation on statistical inference"
There are 4 areas that appear to be important:
1. What is heteroskedasticity
2. What are the effects of heteroskedasticity
3. Detecting heteroskedasticity
4. How do you correct for heteroskedasticity
1. What is heteroskedasticity?
In Reading 11 & earlier in Reading 12 the underlying assumptions of the Linear Regression Model were discussed. Assumption 4 relates to Homoscedasticity, being the opposite of Heteroskedasticity.
The summary of the definition was:
(NB - Remember that Error term also refers to the Residual)
