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QUESTION
E(cY))] = E[ ac( X X )( Y Y )] = acCov( X, Y). What does the sign of covariance mean?
E(cY))] = E[ ac( X X )( Y Y )] = acCov( X, Y). What does the sign of covariance mean? Look at Y = aX + b. Then: Cov(X,Y) = Cov(X,aX + b) = aVar(X). Back to the National Survey of Youth study : the actual covariance was 3028 where height is inches and the wages in dollars. Question: Suppose we measured all the heights in centimeters, instead. There are 2.54 cm/inch? Question: What will happen to the covariance?
