Consider the system y1 = 1 + x + 1, y2 = 2 + 2. The disturbances
Question:
Consider the system y1 = α1 + βx + ε1, y2 = α2 + ε2. The disturbances are freely correlated. Prove that GLS applied to the system leads to the OLS estimates of α1 and α2 but to a mixture of the least squares slopes in the regressions of y1 and y2 on x as the estimator of β. What is the mixture? To simplify the algebra, assume (with no loss of generality) that x = 0.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 54% (11 reviews)
is 0 The model is 0 oll nxX nx xx n n 011 0 012 CHK directly we obtain n 011 nx ...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Question Posted:
Students also viewed these Econometric questions
-
Consider the following models. a. Will OLS estimates of α 1 and β 1 be the same? Why? b. Will OLS estimates of α 3 and β 3 be the same? Why? c....
-
In Problem 7(a), let y1 and y2 be the dual variables. Determine the following pairs of primal-dual solution are optimal: (a) (x1 = 3, x2 = 1; y1 = 4, y2 = 1) (b) (x1 = 4, x2 = 1; y1 = 1, y2 = 0) (c)...
-
Prove using the notion of without loss of generality that min(x, y) = (x + y |x y|)/2 and max(x, y) = (x + y + |x y|)/2 whenever x and y are real numbers.
-
Researchers investigated the relationship between the number of involuntary admissions (detentions) for mental disorders a year under the Mental Health Act 1983 and the number of NHS psychiatric beds...
-
If you insulate your office for $1,000, you will save $100 a year in heating expenses. These savings will last forever. a. What is the NPV of the investment when the cost of capital is 8%? 10%? b....
-
Why is zero pollution not the best solution for society? Can we have too little pollution? Why or why not?
-
Vince Smith opened a law office on March 2, 2010. During the first month of operations, the business completed the following transactions: Requirements 1. Open the following T-accounts: Cash,...
-
Suppose that real GDP is currently $17.1 trillion, potential GDP is $17.4 trillion, the government purchases multiplier is 2, and the tax multiplier is 1.6. a. Holding other factors constant, by how...
-
Directions: Evaluate the logarithms. log, 243 log, 343 log 16 4 log 16
-
The Oklahoma Supreme Court must abide by the Federal Arbitration Act, which is the Supreme Law of the Land. Per Curiam Facts: Eddie Howard and Shane D. Schneider worked as employees of Nitro-Lift...
-
Consider the two-equation system y1 = 1x1 + 1, y2 = 2x2 + 3x3 + 2. Assume that the disturbance variances and covariance are known. Now suppose that the analyst of this model applies GLS but...
-
For the model y1 = 1 + x + 1, y2 = 2 + 2, y3 = 3 + 3, assume that yi2 + yi3 = 1 at every observation. Prove that the sample covariance matrix of the least squares residuals from the three equations...
-
To win a certain lotto, a person must spell the word big. Sixty percent of the tickets contain the letter b, 30% contain the letter i, and 10% contain the letter g. Find the average number of tickets...
-
(a) E(B) = mc 1-8 with m = 5.64910 20 kg and c = 3 108 m/s. (b) x(t) = A sin (g/L t + y) with A = 3 mm, g = 9.81 m/s2, L = 60 cm and p = 0.4 rad. (Calculator must be in radians.)
-
1. A firm has a production function y = KVL, where K, L are positive quantities of capital and labor and y is the quantity of output. Given a positive input prices r for K and w for L, a producer...
-
The following data is for Sophie Wynne Company. Variable Cost per unit $ 1 0 , Fixed costs $ 5 0 0 , 0 0 0 . Calculate the selling price per unit that must be charged in order to generate a profit if...
-
Provide Summary, facts, conclusion and comments from judge on this case, Children's Aid Society of Ottawa-Carleton, [2001] ORLD No 1234
-
This is a new problem with new numbers, start the problem over. A company bought a piece of equipment at the beginning of the year ( January 1 , 2 0 X 1 ) by signing the following note payable. The...
-
Calculate \(\overline{\bar{x}}\) and \(\bar{R}\) of the data of part (c) of Exercise 15.1, and use these values to construct the central lines and three-sigma control limits for new \(\bar{x}\) and...
-
Write a program to move a signed number from smaller register to bigger register. Hint: movzx ax, bl Topic: Data Related Operators and Directives in assembly language
-
Use data from Table 2.1 to verify that (a) The mass of electrons is about 1/2000 that of H atoms; (b) The mass-to-charge ratio (m/e) for positive ions is considerably larger than that for electrons....
-
Show the YuleWalker equations for an ARMA (1, 1) process.
-
Carry out an ADF test for a unit root in the rate of inflation using the subset of the data in Table F5.1 since 1974.1. (This is the first quarter after the oil shock of 1973)
-
Estimate the parameters of the model in Example 15.1 using two-stage least squares. Obtain the residuals from the two equations. Do these residuals appear to be white noise series? Based on your...
-
Assuming a banner ad is delivered 1 2 0 times and receives 3 0 clicks, calculate the CTR .
-
Case 1: Consider the Following Case: Jenny Cochran, a recent graduate of the University of Ottawa with four years of banking experience, was recently brought in as assistant to the chairman of the...
-
What is the true cost of capacity at a bottleneck? What was the purpose of the red / green tag system introduced by Alex? What bottlenecks did it help and how?
Study smarter with the SolutionInn App