Business, 10.03.2020 23:41, xojade

Why is it impossible to compute OLS estimators in the presence of perfect multicollinearity?

A. It is impossible to compute OLS estimators in the presence of perfect multicollinearity because it produces multiplication by 0.

B. It is impossible to compute OLS estimators in the presence of perfect multicollinearity because adding a new explanatory variable does not increase fit of the model.

C. It is impossible to compute OLS estimators in the presence of perfect multicollinearity because it produces division by 0.

D. It is impossible to compute OLS estimators in the presence of perfect multicollinearity because the conditional distribution of the error term has a nonzero mean.

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Why is it impossible to compute OLS estimators in the presence of perfect multicollinearity?