In Order to Use the T-Statistic for Hypothesis Testing and Constructing

Multiple Choice

In order to use the t-statistic for hypothesis testing and constructing a 95% confidence interval as $\pm$ 1.96 standard errors, the following three assumptions have to hold:

A) the conditional mean of u_i, given X_i is zero; (X_i,Y_i) , i = 1,2, …, n are i.i.d. draws from their joint distribution; X_i and u_i have four moments
B) the conditional mean of u_i, given X_i is zero; (X_i,Y_i) , i = 1,2, …, n are i.i.d. draws from their joint distribution; homoskedasticity
C) the conditional mean of u_i, given X_i is zero; (X_i,Y_i) , i = 1,2, …, n are i.i.d. draws from their joint distribution; the conditional distribution of u_i given X_i is normal
D) none of the above