1
Q
What is the deterministic and what is the stochastic/random part of a linear regression model?
A
Deterministic is Xβ, random is ε
2
Q
What does the notation of vector y hat mean?
A
It represents fitted values; the values we’d obtain for y if β estimates were equally to real β (no error terms)
3
Q
What is the scalar transpose device?
A
If a matrix expression comes out to a scalar (1x1 matrix) then it must equal it’s own transpose
4
Q
Starting from scratch, find the OLS estimator β^
A
Now
