3) Consider the following formula: Var(B;)= 0 SST, (1-R}) (5 points) a) Explain what each term:...

   

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3) Consider the following formula: Var(B;)= 0² SST, (1-R}) (5 points) a) Explain what each term: Var(B), o², SST, and Rn means; formulas are optional if your explanation is good. b) What is the difference (in words, not equations) between o² and ² c) Suppose the variable x₁ is highly correlated with many of the other variables in the regression. Which term on the right hand side of the equation will this affect, and what will be the effect on the Var(;) ? 3) Consider the following formula: Var(B;)= 0² SST, (1-R}) (5 points) a) Explain what each term: Var(B), o², SST, and Rn means; formulas are optional if your explanation is good. b) What is the difference (in words, not equations) between o² and ² c) Suppose the variable x₁ is highly correlated with many of the other variables in the regression. Which term on the right hand side of the equation will this affect, and what will be the effect on the Var(;) ?

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a VarB This represents the variance of the coefficient estimate B in a regression model This denotes ... View the full answer