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Probelm:
(a) Differentiate between homoscedasticity and heteroscedasticity.
(b) Outline the reasons why the variances of disturbance term may vary.
(c) Given the 3 observations (1,4) , (2,6) and (3,7), with the true model being
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demand for tea, Y, are assumed to be affected by income of students, X. A simple linear regres-sion analysis was performed on 20 observations and the results were: Independent vari
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