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Use the data in LOANAPP.RAW for this exercise.
(i) Estimate the equation in part (iii) of Computer Exercise C7.8, computing the heteroskedasticity-robust standard errors. Compare the 95% confidence interval on Bwhite, with the non-robust confidence interval.
(ii) Obtain the fitted values from the regression in part (i). Are any of them less than zero? Are any of them greater than one? What does this mean about applying weighted least squares? |
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