Suppose that Yi = b0 + b1Xi + ui, where (Xi , ui ) are i.i.d
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Suppose that Yi = b0 + b1Xi + ui, where (Xi , ui ) are i.i.d., and Xi is a Bernoulli random variable with Pr(X = 1) = 0.
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Suppose that Yi = b0 + b1Xi + ui, where (Xi , ui ) are i.i.d., and Xi is a Bernoulli random variable with Pr(X = 1) = 0.20. When X = 1, ui is N(0, 4); when X = 0, ui is N(0, 1). a. Show that the regression assumptions in Key Concept 4.3 are satisfied. b. Derive an expression for the large-sample variance of bn 1. [Hint: Evaluate the terms in Equation (4.21).]
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