Suppose you have the following model y i = b0 +b1 x i + u i, i =1....n, n + 1.....n + p with the classical assumptions being satisfied. You want to estimate the model using the first n number of observations and then predict the rest of the observations. a) Show that the prediction error for the n+1th observation is made up of two components, estimation error and the random disturbance term that occurs inherently in the prediction period. b) Show that the components you obtained in (a) are uncorrelated.
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Suppose you have the following model
y i = b0 +b1 x i + u i, i =1....n, n + 1.....n + p
with the classical assumptions being satisfied. You want to estimate the model using the first n number of observations and then predict the rest of the observations.
a) Show that the prediction error for the n+1th observation is made up of two components, estimation error and the random disturbance term that occurs inherently in the prediction period.
b) Show that the components you obtained in (a) are uncorrelated.
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