Write Down,in General,the Variance-Covariance Matrix for the Multiple Regression Error

question 18

Essay

Write down,in general,the variance-covariance matrix for the multiple regression error term U.Using the assumptions cov(ui,uj|XiXj)= 0 and var(ui|Xi)= .Show that the variance-covariance matrix can be written as In.

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Definitions:

Expense Recognition Principle

An accounting principle that dictates expenses should be recognized in the same period as the revenues they help to generate.

Physical Count

A manual inventory verification process where actual items are counted to ensure records match.

Inventory Account

A balance sheet account containing the cost of goods a company holds for sale in the ordinary course of business.

Goods in Transit

Merchandise or products that have been shipped by a seller but not yet received by the purchaser, present in the distribution channel.