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Consider the following regression model: yi = 0 + ui 1 where we assume that E [ui] = 0. You have a random sample of
Consider the following regression model: yi = 0 + ui 1 where we assume that E [ui] = 0. You have a random sample of N independent observations y1, ..., yN from a population that satisfies this model. (a) What is the expression of 0 which minimizes the sum of the residuals squared? Write and solve the first order condition of the minimization problem to be solved
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