Question: In the model Y i = 1 + 2 D i + u i , let D i = 0 for the first

In the model Y_i = β₁ + β₂D_i + u_i , let D_i = 0 for the first 40 observations and D_i = 1 for the remaining 60 observations.You are told that u_i has zero mean and a variance of 100. What are the mean values and variances of the two sets of observations?

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