Lahore University of Management Sciences

Department of Economics

Homework 1 (Econometrics and Research Methodology I) Due: October 04, 2019

1. Consider the following Matrix:

Is the matrix invertible? Find the co-factor matrix and the inverse of A and Calculate the
trace of A. (10 marks)

2. Define c1’ = [1 1 1 1 1 1], c2’ = [1 1 0 0 -1 -1], c3’ = [1 1 0 0 -1 -1], c4’ = [1 1 0 0 -1

-1], and C = [c1 c2 c3 c4]. Show that c1 may be written as a linear combination of
c2’, c3’, and c4’. That is, find the constants λ2, λ3, and λ4 such that c1 = λ2c2 + λ3c3 +
λ4c4. Comment on the rank of C. (10 marks)

3. For a n*k matrix X, define P = X(X’X)-1X’ and M = (I – P). Verify that MP = Ф.

Also if x1 = [1 1 1 1 1 1], x2 = [1 2 3 4 5 6], x3 = [4 -2 3 -5 10 8], and X = [x1 x2
x3], numerically evaluate P and M and verify that MP = Ф. (10 marks)

4. For the following two matrices S and T:

5.
Compute (15 marks)

6. Let K be a matrix of order 2x4:

a. Find matrix O is such that (5 marks)

b. Find matrix P such that (3 marks)
c. Prove if (2 marks)
d. Show that O and P are symmetric and idempotent (5 marks)

7. Let ε ~ N(Ф, σ2І) and M be a symmetric idempotent matrix. Find the distribution
of e = Mε. (10 marks)