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QUESTION
Suppose the Y = a + bX +U, where X and U are random variables and a and b are constants. Assume that E[U|X] = 0 and that Var[U|X) = X^2 c. Is U
Suppose the Y = a + bX +U, where X and U are random variables and a and b are constants. Assume that E[U|X] = 0 and that Var[U|X) = X^2
c. Is U independent of X? Why?
d. Show the E[U] = 0 and that Var[U] = E[X^2]
