Homework Help is Here – Start Your Trial Now!
Math
Probability
Show that Var (Y) = Var(ε₁) = 0².

Show that Var (Y) = Var(ε₁) = 0².

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
See similar textbooks
icon
Related questions
Question
Show that Var (Y) = Var(ε₁) = o2².
Transcribed Image Text:Show that Var (Y) = Var(ε₁) = o2².
Expert Solution
Step 1

Let us consider a simple linear regression.

The equation of a simple linear regression model is:

yi=β0+β1xi+εi

Here, yi is the dependent variable 

β0 is the intercept 

β1 is the slope

xi is the independent variable

εi is the error term

The error terms are normally distributed with mean 0 and variance σ2.

yi is distributed with mean β0+β1xi and variance σ2.

 

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer