Homework 1

Homework 1 - ECONOMETRICS, 01:220:322:13 Instructor: Adam...

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ECONOMETRICS, 01:220:322:13 Instructor: Adam Gulan Spring 2008 HOMEWORK #1 (due on 03/03/2008) Please answer all questions. I expect you to provide all necessary derivations. Reporting only the ultimate answer counts as zero points. 1. Consider the following distribution of two random variables, X and Y. Joint probabilities are given in the table: X=0 X=1 Y=0 0.3 0.05 Y=1 0.2 0.3 Y=2 0.1 0.05 Specify and compute the following: - All marginal probabilities - All conditional probabilities - VAR(X) and VAR(Y) - COV(X,Y) and CORR(X,Y), where CORR denotes the correlation coefficient - Conditional means E(X | Y=0) and E(Y | X=0) - Conditional variances VAR(Y | X=0) and VAR(X | Y=1) - Skewness and kurtosis in the marginal distribution of Y (here, treat Y as if it were the only existing random variable) Are the variables X and Y independent ? Why or why not ? 2. Solve problem 2.5 from your textbook. 3.
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This note was uploaded on 04/13/2008 for the course ECON 322 taught by Professor Francisco during the Spring '07 term at Rutgers.

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Homework 1 - ECONOMETRICS, 01:220:322:13 Instructor: Adam...

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