ECS3706/ASSIGNMENT 1/2026
Assignment 01 Semester 01
Econometrics
ECS3706
Semester 1
Department of Economics
BARCODE
, 1 Which of the following statements is/are correct?
a The Ordinary Least Squares (OLS) technique maximises the
sum of squared residuals.
b An increase in the number of predictors is the best way of
increasing predictive accuracy
c The OLS estimators are always the Best Linear Unbiased Estimators (BLUE)
[1] a
[2] a and b
[3] a, b and c
[4] b and c
[5] Not [1], [2], [3] or [4]
• Statement a is incorrect because OLS minimizes, not maximizes SSR
• Statement b is not reliable as increasing predictors can lead to overfitting.
• Statement c is true under certain conditions.
2 Which of the following techniques can help with an analysis of the relationship
between two or more variables for prediction insights?
a Standard error
b Regression
c Correlation
[1] a
[2] a and b
[3] b
[4] b and c
[5] Not [1], [2], [3] or [4]
• Standard Error: This is a measure of the amount of variability or dispersion of a
sample statistic (like the sample mean) from the actual population parameter. It
does not itself analyze relationships between variables for predictive insights.
• Regression: This statistical technique is specifically used to understand the
relationship between dependent and independent variables. It helps to predict the
value of a dependent variable based on the values of one or more independent
variables. Hence, regression is a predictive analysis technique.
• Correlation: This technique measures the strength and direction of the
relationship between two variables. While it helps identify whether a relationship
exists, it does not provide a model for prediction in the way that regression does
2
Assignment 01 Semester 01
Econometrics
ECS3706
Semester 1
Department of Economics
BARCODE
, 1 Which of the following statements is/are correct?
a The Ordinary Least Squares (OLS) technique maximises the
sum of squared residuals.
b An increase in the number of predictors is the best way of
increasing predictive accuracy
c The OLS estimators are always the Best Linear Unbiased Estimators (BLUE)
[1] a
[2] a and b
[3] a, b and c
[4] b and c
[5] Not [1], [2], [3] or [4]
• Statement a is incorrect because OLS minimizes, not maximizes SSR
• Statement b is not reliable as increasing predictors can lead to overfitting.
• Statement c is true under certain conditions.
2 Which of the following techniques can help with an analysis of the relationship
between two or more variables for prediction insights?
a Standard error
b Regression
c Correlation
[1] a
[2] a and b
[3] b
[4] b and c
[5] Not [1], [2], [3] or [4]
• Standard Error: This is a measure of the amount of variability or dispersion of a
sample statistic (like the sample mean) from the actual population parameter. It
does not itself analyze relationships between variables for predictive insights.
• Regression: This statistical technique is specifically used to understand the
relationship between dependent and independent variables. It helps to predict the
value of a dependent variable based on the values of one or more independent
variables. Hence, regression is a predictive analysis technique.
• Correlation: This technique measures the strength and direction of the
relationship between two variables. While it helps identify whether a relationship
exists, it does not provide a model for prediction in the way that regression does
2
