Question 9 5 9. How do you think the violation of Assumption #3 of the simple li

Question

Question 9 5 9. How do you think the violation of Assumption #3 of the simple linear regression model affects the OLS estimators of the intercept and the slope? (To answer the question, tell me if the intercept and the slope will be biased or not. If it is biased, then use an specific example( it can be our textbook example of student performance and class si?e) with the appearance of an outlier to illustrate in what direction will the intercept arid the slope will be biased overestimate or underestimate.) HTML Editorg Pa 7 8 9

Explanation / Answer

There is no such assumption of linear regression as "Large Outliers are likely". If there is Outlier present in the data treat it with procedures like percentile capping method. The Regression estimates are not biased but oviously presence of outlier will effect the value.

Assumption of Linear regression

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