Consider the regression mode, y = a + Bx + ɛ; where, E (ɛ | x) = 0, E(ɛx) = 0, Var (ɛ|x)= oʻ, and Var [(a + Bx)|x] = 0. (a) Derive Var(y|x).
Consider the regression mode, y = a + Bx + ɛ; where, E (ɛ | x) = 0, E(ɛx) = 0, Var (ɛ|x)= oʻ, and Var [(a + Bx)|x] = 0. (a) Derive Var(y|x).
MATLAB: An Introduction with Applications
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Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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![1. Consider the regression mode, y = a + ßx+ɛ; where, E (ɛ | x) = 0, E(ɛx) = 0, Var (ɛ|x)= oʻ,
and Var [(a+ ßx)|x] = 0.
(a) Derive Var(y|x).
(b) The errors are homoscedastic [i.e, Var (ɛ\x)= o²] in this case. Based on the given regression
equation, show that, Var(y|x) < Var (y).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd2d8f98a-e204-4834-bafa-04734716e97b%2Fc691bdf6-c35e-4b3f-8682-aaf68bdcfa11%2Fe36mcz_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Consider the regression mode, y = a + ßx+ɛ; where, E (ɛ | x) = 0, E(ɛx) = 0, Var (ɛ|x)= oʻ,
and Var [(a+ ßx)|x] = 0.
(a) Derive Var(y|x).
(b) The errors are homoscedastic [i.e, Var (ɛ\x)= o²] in this case. Based on the given regression
equation, show that, Var(y|x) < Var (y).
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