Question: A sample of 100 observations produces the following sample data: The underlying bivariate regression model is y1 = + 1, y2 = +

A sample of 100 observations produces the following sample data: The underlying bivariate regression model is y1 = μ + ε1, y2 = μ + ε2.

a. Compute the OLS estimate of μ, and estimate the sampling variance of this estimator.

b. Compute the FGLS estimate of μ and the sampling variance of the estimator.

1 = 1, 92 = 2, y1 = 150, y2y2 = 550,

1 = 1, 92 = 2, y1 = 150, y2y2 = 550, Vy2 = 260.

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E The model can be written as Therefore the OLS estimator is m iiiiiy y2 nyny nn Yy2 15 ... View full answer

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