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Unformatted text preview: Chapter 2 Answers 2. We know from Table 2.2 that = = . Pr ( 0) 0 22, Y = = . Pr ( 1) 0 78, Y = = . Pr ( 0) 0 30, X = = . Pr ( 1) 0 70. X So (a) ( ) Pr ( 0) 1 Pr ( 1) 0 22 1 0 78 0 78, ( ) Pr ( 0) 1 Pr ( 1) 0 30 1 0 70 0 70 Y X E Y Y Y E X X X = = = + = = . + . = . = = = + = = . + . = . . (b) 2 2 2 2 2 2 2 2 2 2 2 2 [( ) ] (0 0.70) Pr ( 0) (1 0.70) Pr ( 1) ( 0 70) 0 30 0 30 0 70 0 21 [( ) ] (0 0.78) Pr ( 0) (1 0.78) Pr ( 1) ( 0 78) 0 22 0 22 0 78 0 1716 X X Y Y E X X X E Y Y Y = = = + = =  . . + . . = . , = = = + = =  . . + . . = . . (c) Table 2.2 shows Pr ( 0, 0) 0 15, X Y = = = . Pr ( 0, 1) 0 15, X Y = = = . Pr ( 1, 0) 0 07, X Y = = = . Pr ( 1, 1) 0 63. X Y = = = . So cov( , ) [( )( )] (0  0.70)(0  0.78)Pr( 0, 0) (0 0 70)(1 0 78)Pr ( 1) (1 0 70)(0 0 78)Pr ( 1 0) (1 0 70)(1 0 78)Pr ( 1 1) ( 0 70) ( 0 78) 0 15 ( 0 70) 0 22 0 15 0 30 ( 0 78) 0 07 XY X Y X Y E X Y X Y X Y X Y X Y = = = = = + . . = , = + . . = , = + . . = , = =  . . . +  . . . + . . . + . 30 0 22 0 63 0 084, 0 084 ( , ) 0 4425 0 21 0 1716 XY X Y cor X Y . . = . . = = = . ....
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This note was uploaded on 05/03/2010 for the course ECON 303 taught by Professor Grant during the Fall '10 term at Lewis and Clark Community College.
 Fall '10
 Grant
 Econometrics

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