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Consider the linear regression model 31-: rx +f3xl-+el-, i:1,2,...,n with unknown parameters a and ,6, known constants x,- and random variables Yj, 61-. Least squares

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Consider the linear regression model 31-: rx +f3xl-+el-, i:1,2,...,n with unknown parameters a and ,6, known constants x,- and random variables Yj, 61-. Least squares estimates of the parameters are 3 : Sl'yfsl'x and a: : F E f; where (a) (2 marks) State the usual assumptions made about the errors s,-. (b) (4 marks) Use least squares to derive the regression coefficient estimates it and B. to) (6 marks} Show that ,8 may be written as EL] cm for certain coefficients q, and hence show that 13(3) 2 ,8

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