Please answer the question three a I a II only .AND QUESITION ONE PART IV
each part should contains correct anwer and maximun word 250 as file attached
(A) Consider the following regressions ttXe6968.04094.32+= RSS=377.17 ttXe7941.00272.282+?= RSS=1536.8
These are auxiliary regressions of squared residuals and were run on data series ordered in increasing values of Xt . The first regression was run over the first 13 observations and second regression over the last 13 observations of the data. The middle set of observations used in the estimation of the original model was removed.
(i) Specify the implied test for heteroskedasticity, stating the null hypothesis. Explain the basis for conducting this test and identify its main limitation. Perform the appropriate test at the 5% significance level. (Maximum 250 words). (25 marks)
(ii) Briefly describe (no numerical calculations needed) two alternative tests for conducting heteroskedasticity using the original model. (Maximum 250 words).
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