Question: 6. In this example, we will create a few random data sets and fit linear models to them. Since we will be creating the data



6. In this example, we will create a few random data sets and fit linear models to them. Since we will be creating the data set we will be in god-mode. We will know everything about the data. We will use this exercise to verify the fact what we have been doing makes sense. (In both Toluca and ACT datasets we do not know the true Bo, Bi and o?). Let the true model is Y = 3 + .1.x + and e~ N(0,1). Suppose you know x, to compute Y we need to first generate normal random variable with mean 0 and variance 1 and then add it to 3+.1.x. Suppose x
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