1. What is the conditional expectation function or the population regression function?
2. What is the difference between the population and sample regression functions? Is this a distinction without difference?
3. What is the role of the stochastic error term ui in regression analysis? What is the difference between the stochastic error term and the residual, uˆ i ?
4. Why do we need regression analysis? Why not simply use the mean value
of the regressand as its best value?