Consider the system y 1 = 1 + x + 1 , y 2 =
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 x̅ = 0.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 28% (7 reviews)
The model is The GLS estimator of the full coefficient vec...View the full answer
Answered By
Ishrat Khan
Previously, I have worked as an accounting scholar at acemyhomework, and have been tutoring busines students in various subjects, mostly accounting. More specifically I'm very knowledgeable in accounting subjects for college and university level. I have done master in commerce specialising in accounting and finance as well as other business subjects.
5.00+
135+ Reviews
427+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
Consider the ellipse x2/192 + y2/52 = 1. Determine the sides a and b of the rectangle with the largest area that can be enclosed by the ellipse.
-
Consider estimation of the following two-equation model:y 1 = 1 + 1 ,y 2 = 2 x + 2 . A sample of 50 observations produces the following moment matrix: a. Write the explicit formula for the GLS...
-
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....
-
Perez Manufacturing Company began operations on January 1. During the year, it started and completed 1,740 units of product. The financial statements are prepared in accordance with GAAP. The company...
-
Name the two different nucleons.
-
Kate Collins has opened Fontina and Stuff, a wholesale grocery and cheese company. The following transactions occurred in February: Required 1. Journalize the transactions. Beginning balances of...
-
Following data refers to a test on a petrol engine. Indicated power \(=30 \mathrm{~kW}\), Brake power \(=26\) \(\mathrm{kW}\), Engine speed \(=1800 \mathrm{RPM}\), Brake specific fuel consumption...
-
Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2016. Adams paid a total of $603,000 in cash for these shares. The 10 percent non-controlling...
-
On December 31, Padre acquires Sol's outstanding stock by paying $154,000 in cash and issuing 16,700 shares of its own common stock with a fair value of $40 per share. Padre paid legal and accounting...
-
On November 1, 2019, Campbell Corporation management decided to discontinue operation of its Rocketeer Division and approved a formal plan to dispose of the division. Campbell is a successful...
-
Consider the following two samples: a. Show that both samples have the same mean and variance. b. Use the Wilcoxon rank-sum test to test the null hypothesis that the population means are equal. What...
-
The following MINITAB output presents the results of a hypothesis test for the difference X ?? Y between two population means. a. Is this a one-tailed or two-tailed test? b. What is the null...
-
Create a neutral delta portfolio with two options on the same stock and evaluate the position in terms of the position's OPM value and gamma. On the OVME screen, click the + icon next to "Deals" to...
-
You have a business worth $1,000,000 and other assets (including your home) worth an additional $750,000. What is the recommended automobile insurance policy that you should carry to be FULLY...
-
You have a retirement account that earns 5 percent annual interest with the total account balance of $400,000. How much a year can you withdraw for next 20 years if your first withdrawal starts a...
-
Freedew Limited has 20 million shares. The firm's latest financial statements show shareholders' equity of $163.5 million, net profit of $31.5 million and earnings before interest and tax of $65.4...
-
Think about a time you witnessed a colleague or peer effectively communicating in the midst of a tense, stressful, or tricky situation. What made you aware that they were communicating effectively?...
-
If fixed costs are $ 2 5 0 , 0 0 0 and the variable cost is $ 3 5 per unit, what would the total costs be to produce ?
-
When plotting the thermal resistance network associated with a heat transfer problem, explain when two resistances are in series and when they are in parallel.
-
Wholesalers Ltd. deals in the sale of foodstuffs to retailers. Owing to economic depression, the firm intends to relax its credit policy to boost productivity and sales. The firms current credit...
-
The following is a panel of data on investment (y) and profit (x) for n = 3 firms over T = 10 periods. a. Pool the data and compute the least squares regression coefficients of the model y it = + x...
-
Suppose that the fixed effects model is formulated with an overall constant term and n 1 dummy variables (dropping, say, the last one). Investigate the effect that this supposition has on the set of...
-
What are the probability limits of (1/n)LM, where LM is defined in (11-42) under the null hypothesis that 2 u = 0 and under the alternative that 2 u 0?
-
A bank can either invest money for three months at 4.00% or for nine months at 4.50%. Ignoring actual/360 day count adjustments for the purpose of this question, the three against nine FRA quote the...
-
Shuggy Otis, an executive at Slapfish Corp. (SC) intends to retire in 11 years. SC just announced that it will start depositing $500.00 at the end of each quarter into each of its workers' retirement...
-
On January 1, the Hanover Beverage Company replaced the palletizing machine on one of its juice lines. The cost of the machine was $195,000. The machine's expected life is five years or 480,000...
Study smarter with the SolutionInn App