Question: Consider the simple linear regression model y = 0 + 1x + , with E ( ) = 0, Var( ) =

Consider the simple linear regression model y = β0 + β1x + ε , with E ( ε ) = 0, Var( ε ) = σ

2

, and ε uncorrelated.

a. Show that Cov ˆ , ˆ ββ σ 0 1 2 ( ) = −x Sxx .

b. Show that Cov(y, β1 ) = 0.

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