Question

Asked Oct 5, 2019

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Part 1 and 2

Step 1

1)

Given Data

Y= 1+X+u

u = v + X

E(v) = 0

Var(v) = 1

E(X) =1

Var(x) =2

1)

E(u|X = 1)

**E(u|X = 1)** = E(v+X| X=1) = E(v|X =1) + E(X|X =1) = 0 +1 = **1**

E(v|X =1) = 0 because v is independent of x

**E(y|X = 1)** = E(1+X+u|X =1) = E(1+X+ v+X|X=1) = E(1+2X+v|X =1) = 1+2X + 0

=1+2*1= **3**

E(v|X =1) = 0 because v is independent of x

**E(u|X = 2) **= E(v+X| X=2) = E(v|X =2) + E(X|X =2) = 0 +2 = **2**

**E(Y|X = 2) = **E(1+X+u|X =2) = E(1+X+ v+X|X=2) = E(1+2X+v|X =2) =1+2X + 0

= 1+2*2 + 0 = **5**

**E(u|X ) = **E(v+X|X) = E(v|X ) + E(X|X ) =...

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