Consider two random variables X and Y. Suppose that Y takes on k values y 1 ,..., y k and that X takes on l values x 1 ,..., x l. a. Show that 11eb817c_7714_5139_84e6_8360362e7f7f_SM2685_00 . b. Use your answer to (a) to verify Equation (2.19). c. Suppose that X and Y are independent. Show that xy = 0 and corr( X , Y ) = 0.

Introduction to Econometrics 3rd Edition by James Stock, Mark Watson

Edition 3ISBN: 978-9352863501

Edition 3ISBN: 978-9352863501

Exercise 4

Consider two random variables X and Y. Suppose that Y takes on k values y 1 ,..., y k and that X takes on l values x 1 ,..., x l.
a. Show that

.
b. Use your answer to (a) to verify Equation (2.19).
c. Suppose that X and Y are independent. Show that xy = 0 and corr( X , Y ) = 0.

Explanation

Verified

We are asked to consider two random vari...