I've been looking over some regression models lately and I came across one which, although similar, differs from the "standard" simple linear model. I was hoping somebody could provide some assistance with some properties that I'm confused with.
Assuming the regression form:
with expected value:
and, from what I've worked out:
, **, **
**These could be wrong.
How can it be shown that:
I know that the covariance formula is given by:
However, I'm confused about how to manipulate this formula to yield the desired result.
Here, I know that if it can be shown that:
it follows that:
However, as in part (a), I'm confused about how to develop the covariance formula accordingly.
Last edited by Rupert; 10-30-2012 at 09:06 PM. Reason: Additional information. improved formatting.
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