The OLS estimator is derived by A)connecting the Y_i corresponding to the lowest X_i observation with the Y_i corresponding to the highest X_i observation. B)making sure that the standard error of the regression equals the standard error of the slope estimator. C)minimizing the sum of absolute residuals. D)minimizing the sum of squared residuals.

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Quizplus · Accepted Answer

The OLS estimator is derived by minimizing the sum of squared residuals, which is the vertical distance between the observed and predicted values of the dependent variable. This method is known as the method of least squares and results in the estimates of the slope and intercept coefficients that provide the best linear fit to the data.

The OLS Estimator Is Derived by