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(Fox 6.5) Maximum likelihood estimation of the simple-regression model: Under all linear model assumptions, the Ks are independently normally distributed random variables with mean 04+

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(Fox 6.5) Maximum likelihood estimation of the simple-regression model: Under all linear model assumptions, the Ks are independently normally distributed random variables with mean 04+ [32:13 and common variance 052' Show that if these assumptions hold then the least-squares coefcients A and B are the MLEs of o: and ,6 and that 6? = 2 63/11, is the MLE of of. Note that the MLE of the error variance is biased. (3 points) Hints: Note that the joint probability density for the Yis is a product of their marginals under independence. The marginals are: 1 (93' - (a + 39%))2] -= ex Take the log of the product to get the loglikelihood. It is simpler to optimize the log-likelihood using calculus

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