1. Say whether you think each of the following statements are true or false, giving a one sentence justification for your answer. Marks will only be given for a correct answer with justification. Consider the linear model with k regressors, including a constant y = X'B + €, where it is known that plim-X'e #0 (n denotes sample size). Suppose the columns of the matrix Z contain m = k instruments, including a constant, such that plim Z'e = 0, plim-Z/X = Qzx, a matrix of rank k, and plim-Z'Z = Qzz, a matrix of rank m. Let X and ŷ denote the fitted values from regressing the columns of X and y respectively on Z. Which of the following will give consistent estimates of 3 ? (a) (X'X)-¹X'y. (b) (X'X)-¹X'ŷ. (c) (Z'X)-¹Z'y. (d) (Z'X)-¹X'y. (e) (X'X)-¹X'ŷ.