Project 11

# Project 11 - Assumption number 2 holds because Ei and Ej...

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Project 11 2.) E [Y] = E [-7+2x -6x 2 + e] = E[-7] + E [2x] + E[-6x 2 ] + E[e] = -7+2E[x] – 6E[x 2 ] + E[e] = -7 + 2*1 – 6E[x 2 ] + 0 = -7 + 2 – 6*2 = -17 E[Y1] = -7 + 2 + 6*2 = 7 5.) fit and CI Fit = -18.036 CI = (-18.523, -17.548) 8.) is assumption 1 valid yes because we know that y i = -7 +2x -6x 2 + e this is the way we generated the population Assumption # 2 says that correlation Ei, Ej = 0 for all (i, j)
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Unformatted text preview: Assumption number 2 holds because Ei, and Ej are uncorrelated. We took a random sample meaning all of those E’s are independent of each other. If they are independent, they are uncorrelated Assumption # 3 says that the variance of Ei given Xi = V[Ei] = sigma 2 It holds because sigma 2 = 1 Assumption # 4 says E ~ N(0,1) It holds because we generated the population...
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## This note was uploaded on 02/23/2010 for the course BUAD 310 at USC.

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