Question 1:
Consider the simple regression model: !Yi = β0 + β1Xi + ei
(a) Explain how the Ordinary Least Squares (OLS) estimator formulas
for !β̂ and !β̂ are derived.
(b) Under the Classical Linear Regression Model assumptions, the
ordinary least squares estimator, OLS estimators are the “Best
Linear Unbiased Estimators (B.L.U.E.).” Explain.
(c) Other things equal, the standard error of β! ̂ will decline
as the sample size increases. Explain the
importance of this.
Question 2:
Consider the following...