AdvancedMultiple choice

Your first-stage F-statistic is 44. What does that tell you about the IV estimate?

  1. AThe instrument is weak, so IV is biased towards OLS and its inference is unreliable
  2. BThe instrument is fine, since F=4F = 4 is significant at 5%5\%
  3. CThe exclusion restriction has been violated
  4. DThe second-stage standard errors should simply be widened

The worked solution is in Premium

The answer, the full working and the one idea to take away – for this and all 1,322 questions in the bank. Answer it in practice and your working is marked, with a known mistake named when you make one.

Start the 7-day free trialPractise it with Premium

Reported in interviews at

Citadel, Two Sigma, D. E. Shaw

More regression and econometrics questions

Your first-stage F-statistic is 4. What does that tell you about the IV estimate? · QuantMax