# Question

Refer to Exercise 13.14 and data file Money UK. Let ei denote the residuals from the fitted regression and y`i be the in-sample predicted values. The least squares regression of e2 on y`i has coefficient of determination of 0.087. What can you conclude from this finding? Let ei denote the residuals from the fitted regression and y`i be the in-sample predicted values. Estimate the least squares regression of e2i on y`i and compute the coefficient of determination. What can you conclude from this finding?

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