Could somebody give an example of Unconditional Heteroskedasticity?
anything seasonal is example. Think energy used to heat homes.
I was hospitalized for this last year
CardShark Wrote: ------------------------------------------------------- > anything seasonal is example. Think energy used > to heat homes. Thanks CardShark. Does it mean that we can avoid Unconditional Heteroskedasticity by increasing the number of observations used in the regression? Or does it mean that Unconditional Heteroskedasticity exists on data from a single business cycle?
It will still be there with increased n. It could exist on data from a single business cycle. Either way, dont’ really worry about it. It doesn’t cause any problems for statistical inference (conditional does). the correction methods are out of the scope of the CFA curriculum.