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(d), (e) please Q3. Suppose X1 and X2 are independent. Both have Bernoulli distribution, equal to one with probability 0.5. a) What is the correlation
(d), (e) please Q3. Suppose X1 and X2 are independent. Both have Bernoulli distribution, equal to one with probability 0.5. a) What is the correlation coefficient between X1 and X2 ? b) What is the probability distribution of the product X1X2 ? c) What is the covariance between X1 and X1X2 ? d) Suppose E(YX1,X2)=1+X1+2+X1X2, Now you run a regression: Yi=0+1X1+ui Does ^1 suffer from OVB? If yes, calculate if you can, or explain why you cannot (what information is missing). If no, why? e) Suppose E(YX1,X2)=1+X1+X2+X1X2. Now you run a regression: Yt=0+1X1+2X2+ei Does conditional mean independence hold for any of these regressors? Prove or disprove your claim
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