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    Question

    Which one of the following is not an assumption of Classical Linear Regression Model

    A Xi are stochastic Correct Answer Incorrect Answer
    B Xi and ui are not correlated Correct Answer Incorrect Answer
    C There is no specification bias Correct Answer Incorrect Answer
    D Error term is normally distributed Correct Answer Incorrect Answer

    Solution

    The regressors are assumed to be fixed in repeated sampling i.e. Xi are non-Stochastic in CLRM.

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