You regress Y on two explanatory variables, X1 and X2. Suppose the variance of the regression is equal to 1600, and the variance of X1=1. There are

You regress Y on two explanatory variables, X1 and X2. Suppose the variance of the regression is equal to 1600, and the variance of X1=1. There are 401 observations. What is the

̂

variance of ???? in the following:

(Hint, what is the R2 of a regression of X1 on X2)

a) X1 and X2 are uncorrelated.

b) X1 and X2 have correlation r=.5?

1

c) X1 and X2 have correlation r=.75?

d) X1 and X2 have correlation r=.95?