Statistics Assignment | Professional Writing Services

After having estimated a regression model yi=βi+β2xi+ui, we wish to forecast the value of y∗ given a new observation x∗. We can consider two types of predictions: forecasting the conditional mean of y∗, or forecasting the actual value of y∗ What is true about the variances of these predictions? A.Var[conditional mean] > Var[actual value]. B.Var[conditional mean] = Var[actual value]. C. Var[conditional mean] < Var[actual value]. D. Var[conditional mean] may be larger than Var[actual value] in …

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