By = arg min Ex,y [(Y - BIX) 2] B1 Prove that the optimal solution is Bi = Cov ( X, Y) + E(X E( Y) E(XY) Var (X) + (E(X) 2 E(X2) Note that if E(X ) = E(Y) = 0 then Bi = Cov(X, Y) / Var(X)