Question - Consider the following regression model for i = 1, ..., N: Yi = β1*X1i + β2*X2i + ui
Note that there is no intercept in this model (so it is assumed that β0 = 0).
a) Write down the least squares function minimized by OLS for this regression.
b) Compute the derivatives of the the least squares function with respect to b1, b2.
c) Suppose summation n i=1 X1i*X2i = 0. Show that β1 = [summation n i=1 X1i*Yi]/[summation n i=1 (X1i)^2].