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2. OLS Assumptions about Error Variance and Covariance. Talked last time about omitted variable biasViolates the assumption E(e)=0This was only one of the assumptions we made about errors to show that OLS is BLUEAlso assumed cov(e)=E(ee')=s2InThat is, we assumed e ~ (0, s2In). 3. What Should ee
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