Given the assumptions in column 1 of the table, show that the assumptions in column 2 are equivalent to them.

Assumptions of the Classical Model

(1)…………………………….................... (2)

E(u_i\X_i) ………………………..................E (Yi\X_i) = β₂ + β₂X

Cov (u_i, u_j) = 0 i ≠ j………….............. Cov ₍Y_i, Y_j) = 0 i ≠ j

Var (u_i\X_i) = σ² ……………................. Var (Y_i\X_i) = σ²