Question: Problem 2 [10 points]: Consider the residuals {e; } from the simple linear regression: e, = Vi = yi -Bo -Bix,, i=1, 2, . ..,

Problem 2 [10 points]: Consider the residuals {e; } from the simple linear regression: e, = Vi = yi -Bo -Bix,, i=1, 2, . .., n where B, = SXY/SXX and Bo = y- B X are the OLS estimates for Brand Bo. Show that {e;, i = 1,2,..n} are uncorrelated with the explanatory variables{xi, i = 1,2,..n}. That is, p(x, e) = n-1 (x, - x)(e, - e ) =0. i=1

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