PRMIA Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition 8007 Question # 3 Topic 1 Discussion

PRMIA Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition 8007 Question # 3 Topic 1 Discussion

8007 Exam Topic 1 Question 3 Discussion:
Question #: 3
Topic #: 1

Which of the following is not a direct cause of autocorrelation or heteroskedasticity in the residuals of a regression model?


A.

A structural break in the dependent variable


B.

A high positive correlation between two explanatory variables


C.

The omission of a relevant explanatory variable


D.

Using an inappropriate functional form in the model


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