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 1.96 standard errors,the following three assumptions have to hold:

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