Test the goodness of fit of this model.

INSTRUCTIONS TO CANDIDATES

ANSWER ALL QUESTIONS

1. Consider the CLRM Y = B1 + B2 X2 + B3 X3 + u, where x² = 12, x3 = 12, Σ x2x3 = 8, Σ y2 = 10, Σ yx2 = 10, Σ yxs = 8, X2 = 10, X3 = 5, Y = 12 and n = 23.

(a) Estimate B1, B2 and B3 by the OLS method.

(b) Test the hypotheses Ho: B1 = 0 against Ho: B10

(c) Test the goodness of fit of this model. (5+5+5)

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