Consider the linear regression model Y; = Bo + B1 X; + U¡ for each i = 1,..., n, where Y; represents the average test score of class i and X; represents the size of class i. Which one of the following is true if the sample covariance between average test score and class size is -0.25? а. There is no correlation between Y, X; O b. The variance of X; is negative O c. The OLS estimate of Bß1 is negative d. The values of X1,..., X, are on average smaller than the values of Y1,..., Yn

College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter1: Equations And Graphs
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Consider the linear regression model Y; = Bo + B1 X; + Ui for each i =
1,...,n, where Y; represents the average test score of class i and X; represents the
size of class i. Which one of the following is true if the sample covariance between average test score and class size is -0.25?
а.
There is no correlation between Y;, X;
b. The variance of X; is negative
С.
The OLS estimate of B1 is negative
d. The values of X1, ..., Xn are on average smaller than the values of Y1, . .. , Yn
Transcribed Image Text:Consider the linear regression model Y; = Bo + B1 X; + Ui for each i = 1,...,n, where Y; represents the average test score of class i and X; represents the size of class i. Which one of the following is true if the sample covariance between average test score and class size is -0.25? а. There is no correlation between Y;, X; b. The variance of X; is negative С. The OLS estimate of B1 is negative d. The values of X1, ..., Xn are on average smaller than the values of Y1, . .. , Yn
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