Question

Suppose the relationship between Y and two explanatory

variables in true model is Yi = 5+2.4X1i-3.5X2i + ei . What is the value of beta(1) in the regression equation Yi = α + β 1 +ei if the values of correlation coefficient is 0.9 and variance of X1 and X2 is 2 and 8 respectively

A 1.80

B 2.40

C -3.90

D -1.80

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Solution