Derivations

Problem 1: Derive βˆ
OLS as the solution to a minimization problem – state that
problem and provide its solution, explaining the main steps in your derivation.
Problem 2: Derive E(βˆ
OLS|X) and explain the meaining and implications of this
result. [Hint: what does unbiasedness really mean?] Derive V ar(βˆ
OLS|X), explaining the main steps in your derivations and the implications of this result. What
determines whether β is precisely estimated?
This material is in your class notes. However, your understanding of the
material is essential, so do not copy blindly – make sure you understand
the steps and the main ideas.