Question: Consider the following model: For i = 1, . . . , n, y_i = _1 * x_i + e_i, where E(e_i) = 0 and

Consider the following model: For i = 1, . . . , n, y_i = _1 * x_i + e_i, where E(e_i) = 0 and Var(e_i) = ^2.

Assume also that the random errors are normally distributed, that is, iid e_i N (0, ^2), and that ^2 is known. Find the maximum likelihood estimate (MLE) of _0.

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