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2. Hypothesis testing. You would like to test the null hypothesis Ho: Bo=B1 = 3₂ in the

regression

Yi = Bo + B₁æi + B₂zi + Ei.

Represent this hypothesis in the standard form RB = r, where 3 = (30, 31, 32)'. Suppose that

you know that RB-r is distributed as N (0, 1₂) under the null, and that the value of RB - r

is (2,-1)', where is the OLS estimator of 3. Test Ho.

Fig: 1