Question 2 (10 points) You are given the following model y-put ei. Consider two alternative estimators of β, b2xvix? and b = Zy/X 1. Which estimator would you choose and why if the model satisfies al...
Question 1 Consider the simple regression model (only one covariate): y= BoB1 u Let B1 be the OLS estimator of B1. a) What are the six assumptions needed for B1 to be unbiased, have a simple expression for its variance, and have normal distribution? (3 points) b) Under Assumptions 1-6, derive the distribution of B1 conditional on x\,..., xn. (3 points) In lecture we described how to test the null hypothesis B1 bo against the alternative hypothesis B1 bo, where...
Need help with stats true or false questions Decide (with short explanations) whether the following statements are true or false a) We consider the model y-Ao +A(z) +E. Let (-0.01, 1.5) be a 95% confidence interval for A In this case, a t-test with significance level 1% rejects the null hypothesis Ho : A-0 against a two sided alternative. b) Complicated models with a lot of parameters are better for prediction then simple models with just a few parameters c)...