Which of the following statements are not true for the Linear Probability Model (LPM)?
(A) Conditional probability of occurence of an event conditional on the value of explanatory variable X is a linear function of X
(B) Estimated value of the conditional probability of occurence of the event lies between 0 and 1
(C) Error term is homoscedastic
(D) R2 is a good measure of goodness of fit
Choose the correct answer from the options given below:
1
(B) Only
2
(B) and (C) Only
3
(B), (C) and (D) Only
4
(C) Only