Consider Exercise 9.1 and S 2 , the estimator of 2 . Analysts often use S
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Consider Exercise 9.1 and S2, the estimator of σ2. Analysts often use S2 rather than dividing ΣN i=1 (Xi — X)2 by n — 1, the degrees of freedom in the sample.
(a) What is the bias of S’2?
(b) Show that the bias of S'2 approaches zero as n → ∞.
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