
OLS assumptions
http://img201.imageshack.us/img201/8...mptionsols.jpg
I don't get why the part boxed in red.
Note that X, Y and U are all random variables, how is $\displaystyle E(\beta_1 XX) = \beta_1 X$ ?
Shouldn't it be $\displaystyle E(\beta_1 XX) = \beta_1E(XX)$ since $\displaystyle \beta_1$ is just a constant, then $\displaystyle E(XX) = \sum_{i=1}^n x_i P(X=x_iX=x_i) = \sum_{i=1}^n x_i since P(X=x_iX=x_i) = 1$
Thus $\displaystyle E(\beta_1 XX) = \beta_1 \left(\sum_{i=1}^n x_i\right) \neq \beta_1 X$