Suppose that Yi = 0 + 1Xi + i, where i is N(0, 0.3), 0 = 1.4,

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Suppose that Yi = β0 + β1Xi + ∈i, where ∈i is N(0, 0.3), β0 = 1.4, and β1 = 1.7.
(a) What are the conditional mean and standard deviation of Yi given that Xi = 1? What is P(Yi ≤ 3|Xi = 1)?
(b) A regression model is a model for the conditional distribution of Yi given Xi. However, if we also have a model for the marginal distribution of Xi, then we can find the marginal distribution of Yi. Assume that Xi is N(1, 0.7). What is the marginal distribution of Yi? What is P(Yi ≤ 3)?
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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